Surprise deal ends strike threat ahead of May 8 shareholder meeting
(From left) Minister of Oceans and Fisheries Hwang Jong-woo, Head of the HMM Onshore Labor Union branch Jung Sung-chul, HMM President and CEO Choi Won-hyuk, President of the Korean Federation of Clerical and Financial Service Workers’ Unions Lee Jae-jin, and Head of the Korea Ocean Business Corporation Kim Hyung-jun pose for a commemorative photo at the labor-management agreement signing ceremony held in Yeouido, Seoul, on April 30. (Photo courtesy of HMM)
HMM’s labor and management have reached a sudden agreement to relocate the company’s head office to Busan. HMM announced on April 30 that labor and management agreed on the head office relocation, sharing a common understanding of the greater social causes of balanced national development and strengthening local autonomy.
Previously, labor and management had experienced considerable difficulties during negotiations over the head office relocation. The Onshore Labor Union strongly protested earlier this month, stating that the company had unilaterally pushed forward an agenda item to amend the articles of incorporation for the head office location change through a Board of Directors meeting while labor-management negotiations were ongoing.
The union defined this as an unfair labor practice and initiated legal action, including filing a complaint against the CEO with the Ministry of Employment and Labor, and also announced plans for industrial action aimed at blocking the extraordinary general meeting of shareholders.
Tensions had reached their peak, particularly after the union announced its intention to launch a partial strike if an agreement was not reached before the extraordinary general meeting of shareholders on May 8.
Following this conflict, labor and management reached a sudden agreement. Accordingly, HMM plans to hold an extraordinary general meeting of shareholders on the 8th of next month to proceed with the amendment of its articles of incorporation to change the head office location. The company then plans to promptly complete the legal procedures, such as the registration of relocation.
Labor and management have agreed to first relocate the CEO’s office and then begin full-scale negotiations on the specific details of organizational moves and operational methods, considering company profits and synergy creation. In tandem, they will also pursue a plan to construct a landmark-level head office building in Busan’s North Port.
It is assessed that with this agreement, the possibility of a strike has been virtually eliminated, and a significant portion of management uncertainty has been removed. Analysts note that this is particularly significant as it secures a stable operational foundation for the national flag carrier amidst ongoing global logistics instability, including the war in the Middle East.
The significance of HMM’s agreement to relocate to Busan extends beyond a simple corporate move, as it forms a key pillar of the government’s ‘Marine Capital Busan’ initiative. HMM is the nation’s only ocean-going national flag carrier and the world’s 8th largest shipping company.
The strategy is to build a global maritime cluster by concentrating shipping and logistics functions in Busan, centered around HMM. With some shipping companies having already chosen to relocate to Busan, this move is expected to influence the trend of reorganization across the industry.
An HMM official stated, “The labor-management agreement was reached to harmoniously achieve enhanced company competitiveness, based on a shared understanding of balanced national development and our social responsibility as a national flag carrier,” adding, “As management uncertainty has been resolved, we will further strengthen our global logistics response capabilities in a stable environment.”
Kim Eun-jin
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