HMM Sees Labor Crisis Ahead. How Will They Respond?

South Korea’s largest shipper, Hyundai Merchant Marine (HMM), is looking to face its first union strike in over 45 years of operations. On August 23rd, union members voted for a strike after wage negotiations reached a deadlock following talks in previous weeks.

The union demanded a 25-percent pay raise alongside a bonus equivalent to 1200% of their wages. The demand was met with a counteroffer of an 8-percent wage increase with a 500% bonus by management. The talks fell through with union-members threatening to resign and applying to Swiss-Italian rival MSC.

This was a backlash to a 8-year wage freeze where HMM required a government bailout for a debt-equity swap with Korea Development Bank (KDB) back in 2016. With rival MSC looking to hire more employees while paying higher wages, HMM may lose a big chunk of its workforce if negotiations don’t conclude soon. 

HMM’s record earnings this year boosted operating profit by 10 times to US $1.19 billion, a clear contrast to earning last year during the April-June period. On Monday, HMM saw its share price dip by 2.23 percent to 37,530 won. On August 30th, union members will reconvene to vote for a potential walk-out.