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An HMM container vessel. (Photo: HMM) |
[Alpha Biz= Kim Jisun] A growing conflict over the planned relocation of South Korea’s largest container shipping company, HMM, to Busan is escalating as employee opposition intensifies. The company’s labor union has warned it is prepared to launch a general strike, accusing the government of attempting to force the relocation by leveraging its status as the company’s largest shareholder. Other shipping companies, meanwhile, are reportedly watching the situation closely while weighing their own responses.
According to industry sources on March 16, HMM’s land-based labor union plans to hold a general assembly and rally to approve a general strike on April 2 in front of Cheong Wa Dae Sarangchae in Seoul, protesting the government’s push to relocate the company’s headquarters.
The union claims the government intends to convene an extraordinary shareholders’ meeting without labor agreement and push through amendments to the company’s articles of incorporation to facilitate the relocation, using its majority shareholder position.
The union criticized the move as a violation of collective bargaining rights and a breach of fiduciary duty to prioritize shareholder interests. It warned that if the relocation proceeds, it will file criminal complaints against company directors for breach of trust and seek a court injunction to suspend the validity of the shareholders’ resolution.
Citing a feasibility review conducted by an external organization, the union argues that relocating the headquarters could reduce operational efficiency by as much as 40% due to dispersed operational hubs and potential workforce attrition.
Currently, state-run Korea Development Bank holds a 35.42% stake in HMM, while the Korea Ocean Business Corporation owns 35.08%. With the government effectively controlling a majority of voting rights, the relocation proposal could still pass at a shareholders’ meeting, though a general strike and legal disputes appear increasingly likely.
Observers also suggest that the so-called “Yellow Envelope Act,” which expands the scope of labor disputes, could complicate matters for the government as the effective controlling shareholder. As the law broadens labor dispute issues beyond working conditions to include major management decisions such as business relocations, the union could potentially initiate a legally protected general strike tied to the shareholders’ meeting agenda.
The relocation of HMM to Busan was one of President Lee Jae-myung’s campaign pledges. The government and the Busan city administration aim to build a shipping industry cluster by bringing the Ministry of Oceans and Fisheries and major shipping companies together in Busan, though the gap between policymakers and the industry remains significant.
The broader shipping industry also appears skeptical of relocating headquarters to Busan. In February, the Korea Shipowners’ Association sent letters to about 150 member companies asking about their willingness to move their headquarters, but fewer than 10 companies reportedly responded by the deadline at the end of last month.
“Most shipping companies are internally skeptical about relocating to Busan, but they are reluctant to openly express opposition because they are mindful of the government,” an industry official said.
Shipping companies rely heavily on sales to large corporate clients and financing for vessels worth hundreds of billions of won, and most major corporations and financial institutions are headquartered in Seoul.
Industry observers say that rather than applying pressure to relocate, the government should first introduce practical incentives to improve living conditions for employees, such as corporate tax reductions, special housing supply programs, and access to high-quality schools.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
