IndustriALL Global Union affiliate the Korean Metal Workers’ Union (KMWU) and civil society groups are opposing the merger of Hyundai Heavy Industries with Daewoo Shipbuilding and Marine Engineering. Potentially at stake are global shipping and fossil fuel prices.
The deal needs to be approved at an extraordinary shareholders meeting which will be held on 31 May, merging the world’s largest shipbuilder with the second largest shipbuilder by sales, creating a dominant player with strong monopoly power.
“The acquisition is becoming a negative factor impacting jobs and fair trade on a global scale,” said IndustriALL assistant general secretary, Atle Høie. “IndustriALL will take action to secure trade unions’ rights and social dialogue for the global shipbuilding industry for a sustainable future.”
A memorandum of understanding on the $1.75 billion merger deal was signed on 8 March after secret negotiations between HHI and the state-owned Korea Development Bank, the majority shareholder in Daewoo.
The KMWU has criticized the deal as a Korean government handout to a chaebol run by the family of Chung, Moon Joon. Instead of healthy competition, the deal would give the new company 58.5% of the global liquified natural gas market, 56.6 % of very large crude carriers and 21.2% of all outstanding ship orders worldwide.
The merger will also spin off productive work, as well as HHI debt, to an unlisted company, while retaining the assets in KSOE. The KMWU denounced this as a plan to gouge HHI, shifting the debt into an entity that can be restructured at workers’ expense.
The Korean shipbuilding industry has experienced harsh restructuring, with more than 100,000 workers losing their jobs since 2014. In 2017, during the process of splitting up HHI, the union collective agreement was not recognized, setting a precedent for the further erosion of union influence.