April 25, 2024

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Unionized workers at Daewoo Shipbuilding & Marine Engineering began voting on Feb. 18 on whether to go on strike in opposition to Hyundai Heavy Industries’ proposed takeover.

Voting by the some 5,600-member union set to run through Feb. 19 will be critical in a mega deal between Hyundai Heavy and the state-run Korea Development Bank.

Early this month, HHI, the world’s largest shipyard by sales, and the policy lender KDB said they would sign a formal deal on Daewoo Shipbuilding early next month.

KDB is DSME’s main creditor, with a 55.7 percent stake in the company.

The labor unions at HHI and Daewoo Shipbuilding fiercely opposed the deal claiming it could lead to massive layoffs.

If the takeover goes ahead as planned, the Korean shipbuilding industry is expected to be dominated by two major shipbuilders -- HHI and Samsung Heavy.

Korean shipbuilders, once a cornerstone of the country’s economic growth and job creation, had been reeling from mounting losses in the past few years, caused by an industrywide slump and a glut of vessels amid tough competition with Chinese rivals.

The government has been hoping that the local shipbuilding industry can be overhauled in a way that two major players can dominate the sector to better compete against Chinese rivals and tackle sectoral ups and downs.

By Ram Garikipati and newswires (ram@heraldcorp.com)