DSME's Management Apologizes for Strike

The top management of South Korean shipbuilder DSME issued a public apology Tuesday for a recently-ended subcontractor strike, which affected its operations for 51 days and caused hundreds of millions in losses. 

Acknowledging "the lowered trust of overseas customers" and the "enormous" financial losses incurred during the strike, CEO Park Doo-sun and his leadership team said that they "bow their head in apology." 

“We will listen with humility to the voices and suggestions of all walks of life to improve our management,” DSME's executives wrote. “We will also work together with all members of our company to minimize damage caused by process delays and quickly restore customer trust."

The strike, which began on June 2, has cost the shipbuilder as much as $600 million for lost sales and additional costs. Construction work was delayed on multiple vessels, pushing back deliveries by as much as six weeks and triggering contractual late-delivery penalties. 

The striking subcontractors ended their labor action on Friday after they were threatened with arrest. They accepted a 4.5 percent raise, a fraction of their original demand for 30 percent, and departed the area of the yard they had occupied. More than 96 percent of the union members ratified the agreement, which set out their raise but left open the question of any penalties they might have to pay. 

The subcontractor union's leadership could still end up facing a lawsuit over the cost of the shutdown - and potentially criminal charges. DSME may have no choice but to file a suit against the strike's leaders, according to The Korea Times, or high-level executives could face penalties for failing to recover damages for their investors.

The labor action came at an unwelcome time for DSME: Even before the strike began, the yard was under financial pressure. Steel prices have soared over the past year, driving losses of about $370 million at DSME in the first quarter of the year - despite a surge in new sales.