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Votes of no confidence

Korean shipbuilders are battling labour shortage despite robust orders 

In spite of a fat list of newbuilding orders, Daewoo Shipbuilding & Marine Engineering Company (DSME) is one shipbuilder struggling with labour shortage. It lost some 300 workers to Hyundai Heavy Industries Holdings (HHIH), which was said to offer higher salaries.

Heavily discredited management
While DSME famously demonstrated its stance against the merger last year through a strike, the confidence level amongst workers remained weak. The company lost a substantial number of workers to higher salaries offered by a competitor – leaving DSME in limbo over how to proceed with newbuilding construction. Samsung Heavy Industries (SHI) was suffering heavy losses before it made a massive move to close its 26-year old Ningbo shipyard in Eastern China.

With these 2 newbuilding heavyweights extensively discredited, the industry at large cannot fault the workers for fleeing in droves. Loss of quality workers can be devastating to an enterprise – especially if the reason is preventable. Although DSME and SHI recruited their new batch of employees last month, they have yet to disclose their plans regarding the hiring for permanent positions. Instead of employing regular workers, both companies are reportedly considering signing contracts with additional subcontractors and expanding the number of industrial trainees, given they are still struggling with losses accumulated during the long-term recession in the shipbuilding industry.

“We have trained apprentices at our technical training centre,” a DSME spokesman said without disclosing the specific number of trainees to be hired as regular workers in the future. He also noted that there is a time lag between orders and manufacturing, adding that the company should brace for the possibility of another recession due to the cyclicality of the shipbuilding industry.

The Korea Offshore & Shipbuilding Association (KOSHIPA) said the nation’s shipbuilding industry will need an additional 9,500 workers by September 2022 to commence operations. KOSHIPA’s Managing Director Chung Seok-joo said, “Due to the long-term recession, experienced workers have left and the inflow of new employees has been decreased, worsening the labor shortage. Plans are needed to secure the workforce for stable production.” That essentially is another red flag on the companies’ credibility to keep a stable cohort of experienced personnel.

Marine Online News Team
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