HMM eyes hub-and spoke model as it expands feeder fleet
South Korean flagship carrier HMM wants to rebuild its intra-Asia shipping business, and is expanding ...
By Alison Koo
HMM appointed three Busan-based non-executive directors at its AGM, prompting tension with shareholders and labour unions that see South Korea’s flagship shipping line as bending to the government’s request that the company relocates to the port city.
HMM Land Workers’ Union yesterday filed a complaint against HMM’s CEO, Choi Won-hyuk, to the Ministry of Employment and Labor (MOEL), claiming the relocation was being imposed unilaterally.
South Korea president Lee Jae-myung had made the relocation of HMM and the Ministry of Oceans and Fisheries from Seoul to Busan among his campaign pledges when he was elected last year. Mr Lee’s aim is to strengthen Busan’s status as the country’s shipping centre.
The MOF has moved, along with other major shipping companies like SK Shipping. HMM staff are, however, resistant to uproot from their homes around Seoul.
At the AGM last month, HMM appointed Ahn Yang-soo, former president of KDB Life Insurance; Park Hee-jin, associate professor at Pusan National University’s College of Business Administration; and Seo Geun-woo, former chairman of Korea Credit Guarantee Fund, to succeed three non-executive directors whose terms had expired – Woo Soo-han, Lee Jemma, and Jung Yong-seok.
Shareholders expressed their dissent, one quoted by local media as saying: “Appointing persons based in a specific region rather than shipping, port, and logistics experts appears to be setting up a rubber stamp to secure legitimacy for forcing the relocation to Busan.”
In its complaint to the MOEL, the HMM union stated: “It’s unfair for the company to unilaterally hold a board meeting and force the relocation process while labour-management negotiations are underway.”
The union added that it would apply to the Labour Commission for dispute mediation today, and had not ruled out strike action as well as legal action, including applying for a provisional injunction to prohibit the holding of related shareholders’ meetings.
The Busan Chamber of Commerce and Industry predicts the relocation of HMM would have an economic ripple effect of more than KRW15trn ($10.14bn) and create more than 20,000 jobs over five years.
The union has countered this argument, claiming HMM has functioned well with a corporate HQ in Seoul and the company’s Busan office handling crew and ship management matters.
A HMM spokesperson told The Loadstar: “It is true that the labour union has expressed opposition to the proposed relocation of the company headquarters to Busan. However, at this stage, there has been no official communication regarding a specific strike schedule or concrete strike plans.”
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