[THE INVESTOR] Ailing Hyundai Heavy Industries Co. faces tough challenges ahead with the union likely to resort to “powerful” strikes.

On June 17, the union announced that industrial dispute has occurred, opening the way for industrial action in negotiating with the management.

Although the union has cited slow progress in the negotiations, pundits say that the move is likely to be aimed at meeting the legal requirements for industrial action before the restructuring measures are executed. 

As part of the plans to normalize operations, Hyundai Heavy plans to cut costs and debt by 3.5 trillion won (US$ 2.98 billion). The plans also include selling assets unrelated to its core businesses and measures for lowering labor costs.

The union’s leader had also hinted that any actions will be aimed at resisting the restructuring measures.

“(Due to the company’s plans) it is unclear when (union members) will become irregular workers, or when the wages will be cut,” union leader Baek Hyung-rok said on June 15, adding that “powerful” strikes will be orchestrated.

However, industrial action by the union is unlikely until the second week of July due to legal procedures required.

The union plans to file for National Labor Relations Commission’s mediation next week. If the commission judges that there is large disparity in the views of the union and the management, the union can legally seek a strike. The union can then put the issue of strike to the vote. Given the required steps, Hyundai Heavy union will be able to stage strikes from the second week of July should the members agree.

By Choi He-suk (cheesuk@heraldcorp.com)