Why Dose DSME Union Oppose Special Ship Division Spin-off

Daewoo Shipbuilding & Marine Engineering (DSME) union is in dilemma now. Although the majority of the workers voted in favor of a walkout on June 14, they are feeling pressure from the government and creditors to go on strike. Financial authorities and creditors are giving an official warning that they would cut off upcoming financial support of 1 trillion won (US$868.06 million won) when the labor union pushes ahead with strike. Then, why does the union still use a strike as a trump card in spite of that?

The DSME union insists that creditors can spin off its specialized defense business unit into a wholly owned subsidiary and liquidate or sell DSME, which is a non-defense unit and parent company, to foreign companies in the name of bad company. When the defense unit is included in the company, it is impossible to sell it overseas under the Defense Acquisition Program Act and Foreign Investment Promotion Act. But, once the unit is separated, creditors can sell the company to overseas companies.

Considering the domestic shipbuilding market conditions, the labor union believes that the company can be sold to foreign companies, which are dying to secure excellent technologies, particularly Chinese companies. Due to a possible negative public sentiment over the overseas sales, creditors cannot sell the company right away. However, they will ultimately sell DSME to companies abroad in the medium and long term when its defense unit is separated, according to the union. Given the previous overseas sales for automakers and electronics and electricity companies in the process of restructuring, the company will have only empty shell without core assets like patents and highly skilled employees.

The union of Hyundai Heavy Industries, which submitted the application for labor dispute mediation to the Central Labor Relations Committee on the 20th and is planning to go on strike, also opposes the spin-off of its unit for the same reason. The company plans to separate the equipment support unit with 994 regular employees to subsidiary. The union, however, opposes the plan, citing, “there is no reason to be separated.” Hyundai Heavy is said to be push ahead with the spin-off next week.
Source: BusinessKorea