Turnaround Overshadowed by Looming Strike
Hyundai Heavy Industries Group is coming out the tunnel of recession, but may be hobbled by the labor unions of its affiliates. The unionists of the group's three affiliates have all voted in favor of strike action amid stalled wage and collective bargaining talks.
Korea Shipbuilding & Offshore Engineering (KSOE), the group's intermediate holding company, succeeded in turning a profit in the third quarter of this year thanks to an improvement in its order portfolio, steady cost cuts, and foreign exchange rate effects.
Earlier, on Oct. 27, KSOE announced that its provisional operating profit was estimated at 188.8 billion won on a consolidated basis in the third quarter, up 33.2 percent from the same period of 2021. The figure eclipsed operating profit forecasts by securities companies. During the same period, its sales climbed 19.9 percent to 4,264.4 billion won and its net income 64 percent to 315.9 billion won.
Hyundai Heavy Industries Group managed to make a turnaround in a year thanks to an increase in orders and a strong U.S. dollar, but it still needs to heed the possibility of a slowdown in orders and a drop in ship prices. Its union also poses a risk.
The labor unions of the three affiliates -- Hyundai Heavy Industries Co., Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries -- held a joint press conference at Ulsan City Hall immediately after the earnings announcement. They mentioned the possibility of a simultaneous and rotating strike if the management is lukewarm about the wage and collective bargaining talks this year. At the same time, they said that union executives will stage a strike in Seoul to put pressure on the management.
In this regard, the KSOE management said if all the union demands are accepted, it will inevitably incur an additional cost burden of 250 billion won annually.