DSME workers reach tentative deal to end strike

South Korean contract workers have tentatively agreed to end their strike at the country's No.3 shipbuilder in return for a much smaller wage hike than they had demanded, union officials and subcontractors said on Friday

di Byungwook Kim and Heekyong Yang

Seoul - South Korean contract workers have tentatively agreed to end their strike at the country's No.3 shipbuilder in return for a much smaller wage hike than they had demanded, union officials and subcontractors said on Friday. Since late last month, about 100 sub-contractors pressing for an increase of 30% have occupied the main dock at the shipyard run by Daewoo Shipbuilding & Marine Engineering (DSME) in the southern city of Geoje. Friday's pact leaves open the possibility of legal action to recover strike damages, however: "Both sides have reached an agreement and are drafting a written document to sign," said Jang Seok-won, a spokesperson of the Korea Metal Workers' Union, which represents the strikers. Union officials accepted an offer of a 4.5% wage increase, along with offers of successive employment for workers from some subcontractors that have shut or are about to, another union official told reporters.

But there was no agreement yet on whether subcontractors would pursue plans for legal action to seek strike damages, union officials and subcontractor representatives said. Daewoo has previously said it expected a daily loss of 32 billion won ($24 million) from the strike, adding that the dispute had cost it more than $400 million by mid-July. The construction of eight vessels at five docks has been affected, with delivery dates pushed back by two to five weeks as of Wednesday, a company spokesperson said: "We will put all our capabilities into making up for delayed production, and work harder for a co-operative co-existence with subcontractors," Daewoo Shipbuilding added in a statement.

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