Here is a tit-bit of news, reflecting the looming layoffs in South Korea’s shipping industry::
Park Hee Chan (age: 40), a shipyard electrician, slept under a makeshift blue tent pitched in front of South Korea’s Parliament House for several nights.He travelled last month from his home in the southern port city of Busan to Seoul to stage daily protests as part of his labour union’s efforts to fight for shipyard workers fearful of losing their jobs as the country’s shipbuilders embark on a massive restructuring to cope with a crippling shipping crisis.
Park’s employer, Hanjin Heavy Industries fired him in 2009. He was rehired in 2011 after two years of persistent protests, along with 94 others who were also laid off.
Mr. Park fears history may repeat itself and hopes to do his part to exert pressure on shipbuilders to think twice before axing their staff.
Layoffs are in the works as, reeling from unprecedented losses – with three of the biggest shipbuilding companies in the world, Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering, chalking up a combined operating loss of 8.5 trillion won (S$9.9 billion) last year – South Korea’s shipbuilding and shipping conglomerates are set to downsize.
They are poised to cut a combined 6,000 jobs this year alone, on top of selling non-core assets and shutting down failing business units.
Two of South Korea’s biggest container shipping lines – Hanjin Shipping and Hyundai Merchant Marine (HMM) – are also restructuring and negotiating with shipowners to lower charter rates, amid talks of a merger to streamline and compete more effectively against global rivals.
Experts say the shipping sector is the backbone of international trade which export-driven South Korea relies on heavily. If both Hanjin and HMM were to fold, more than 5,000 jobs will be lost and the economy will suffer damages of US$19.13 billion (S$25.8 billion), according to projections by the Korea Shipowners’ Association.
Shipbuilding, which accounts for 6.5 per cent of gross domestic product and hires some 200,000 workers, has also been a key pillar of South Korea’s US$1.38 trillion economy since the country underwent rapid industrialisation after the 1950-53 Korean War.
Both industries will remain under pressure most of this year, until global conditions improve late next year, said Moody’s Analytics’ assistant director economist Emily Dabbs.
But there are some “bright spots”, she said, adding that the government is supporting restructuring efforts and pushing for companies to focus on areas where they maintain a competitive advantage.
“Korea’s role in the industry remains an important one. The high-end LNG (liquefied natural gas) shipbuilding industry is one where Korean businesses have expertise that their competitors lack. By focusing on new technology, Korean shipbuilders will remain important players in the global industry.”
Korea University’s Professor Kim Byung Ki said the industry is facing “extreme challenge”, but he believes South Koreans will unite and rise above the challenge, especially when their survival is threatened.
However, shipbuilding labour unions are calling for a nationwide protest on July 22 and July 23 and hoping to mobilise 100,000 members, not just from the shipbuilding but also the automobile sector. Auto workers’ unions are fighting for a wage hike and more bonuses.
Mr Kim Tae Jeong, executive director of policy at the Korean Metal Workers’ Union who oversees the shipbuilding sector, said: “We absolutely oppose layoffs and will fight for our members to keep their jobs.”
Some workers, however, have resigned voluntarily and switched careers, instead of waiting for the expected chop.
Mr Mike Kim, who is in his mid-30s, quit his administrative job at a shipyard in the south-eastern port city of Ulsan to move back to his home town Seoul in May. He has found a job in the finance industry.
When asked how his ex-colleagues are coping, he said: “Some of them believe that they will be fine, because the situation will improve. When the global economy gets better, the industry will regain its competitiveness.”
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Source: The Straits Times
