‘Smashing’ subcontracting companies, ‘choking’ workers
‘Quickly quickly’ ? is a common theme in Korean’s mentality. There are a few theories on the origin of this. One of these is the ‘agricultural society’ which has lasted over 5,000 years. In terms of the climate of Korean peninsula, works such as rice planting, irrigating a paddy and harvest should be done on time seasonally and intensively. If they miss the right time, they ruin the whole farming throughout the year. As a result, farmers get used to ‘quickly quickly’ to be on time each season. They have to work to death to survive from hunger for their children as well as themselves. This might be the background of Koreans ‘quickly quickly’ culture.
While Japan revived their economy by ‘reduction-oriented’, South Korea has achieved ‘compressed growth’ by this ‘quickly quickly’ culture. Of course, side effects followed at the same time. The ‘quickly quickly’ culture contributed to a ‘half-ass’ culture, which sees shortcuts become a norm of society.
Risk-taking culture follows compressed growth. A ‘quickly quickly’ culture which wants to regain things left behind rapidly produced a risk-taking culture and this again accelerated ‘quickly quickly’ culture. This circumstance led Korean society to become a ‘Brutal society’ instead of a risky society then.
Let’s have a look at the ‘World’s largest shipbuilding company’ Hyundai Heavy Industry (refer to as HHI below). This shipyard was built in 1974 when Jung-hui Park was a president and Korea was a late runner compared to Japan and other countries. There were a lack of skills and experience. They, however, now have the title of the world’s largest. The ‘quickly quickly’ culture lay on the back of their success by being competitive and completing ships before the due date.
Adverse effects were also considerable. Numerous workers, for instance, died building ships. The year the first HHI ship was completed, 22 workers were killed and 19, 15, and 23 each year afterward.
Moreover, deaths are still ongoing. The only difference is shifting the ‘risk-taking culture’ from their employees to subcontractors. To examine the problematic structure, interviewed HHI’s subcontracting company owner with difficulty. He explained how the process is being done and how the ‘risk-taking culture’ is being passed onto contractors in detail.
“It is strange if workers are not killed in this environment”
On 11th June this year, Mr. Kang (44), a HHI’s subcontractor was killed crushed by a 800 kg steel sheet during the steel fabrication process. The mass-fabrication is the process that makes a large steel sheet by welding individual 800 kg steel sheets. After a temporary welding the 800 kg steel sheet on 1.5 meter high stand with a crane, a main welding is being done after separating the steel sheet from a crane.
At least 3 stands are necessary per 800 kg steel sheet but this rule was not followed. Furthermore, the steel sheet was separated from a crane even before temporary welding. This is why the incident occurred as the stand collapsed not enduring the weight. It wouldn’t have happened with a temporary welding. It was a disaster called by the ‘quickly quickly’ culture.
“Bluntly speaking, the incident in June was caused by the contracted price (the unit cost per ton). The subcontracting company had worked with HHI less than a month and didn’t even join a HHI subcontracting committee. This company was a replacement for the previous subcontracting company which didn’t survive from HHI’s cost ‘smashing’ and was kicked out. Of course, this company accepted the reduced cost so this incident followed. As the contracted price is too low, they couldn’t help save labor costs. It is the way they complete a month-long work within 15 days so that they can meet the estimated price.”
The HHI subcontracting company owner A also added, “Wouldn’t incidents occur in this situation?”. He also said, “It’s even awkward if not”. Separating steel sheets without a temporary welding and not installing steel stands etc. are all to complete the work ahead of schedule.
It is no exaggeration to say that labor cost is the actual process fee in shipyards. Thus, cutting labor hours is the easiest way they can save costs. If the contracted price is cut by half, they have to finish a month-long work within 15 days accordingly. That’s how subcontracting companies make profits.
The problem is that cutting price is not only limited to individual subcontracting companies. According to the subcontracting company owner A, 60% of HHI’s subcontracting companies out of 272 could not pay their workers’ salary. A lot of them were accused by the labor bureau, not paying worker’s salaries and superannuation.
In this environment, it is not easy for them to install safety fence or conduct a safety orientation because they have to pay the rate for the hours of safety orientation and this type of incident in June happened as a result.
“HHI’s trick”
Then, why are HHI budgets this ridiculous price? Mr. A says it’s due to “HHI’s trick”.
“It has been 3 years since HHI cuts the contracted price claiming that they received a ship order with a low price. Then, they reduced the contracted priced with us from 10,000,000 won to 5,000,000 won. They said their business is in trouble and that their deficit would be 8% by 2018 and that the deficit should be divided equally; HHI 4% and subcontracting companies 4%. This is what they say publicly but in reality they will exploit subcontracting companies as much as they can and spit them out.”
By July this year, 48 subcontracting companies closed down in HHI. Mr. A has testified that they become bankrupt due to the ridiculous price contracted by HHI.
The point we need to pay attention to is that those shut down companies are being replaced by short-term companies. In HHI’s subcontracting companies, there are officially registered companies, temporary companies and short-term companies. The short-term company is referred to as 3 month working. These don’t even join subcontracting company committee nor deposit the amount of money registered companies should. While 48 subcontracting companies shut down, 90 more short-term companies appeared.
A also said, “Contracts between HHI and subcontracting companies state that HHI cannot close down subcontracting companies but instead make subcontracting companies to self-destruct by low contract price. They smash the price by killing registered subcontracting companies.”
HHI gets rid of not-well controlled officially registered subcontracting companies and replace them with short-term companies and, control them as they want. According to Mr. A, HHI adopted their own evaluation system from 1st Jan this year. They intend to kick out subcontracting companies by low rates if they don’t listen to HHI. It is a ‘flexible subcontractors’ over ‘flexible labor’.
This means there is a higher chance of incidents happening. The incident in June was also from a 3 month short-term company after the registered one closed down.
Mr. Chang-min Ha, the director of HHI subcontracting branch office explained, “Now it is deemed that dying on the job is natural due to the ‘quickly quickly’ process. Unless this structure changes, deaths will continue like now”.
Although Korea’s shipbuilding industry became world’s number one in the 21st century, the attitude of shipbuilders still remains as it did 40 years ago; at the level of developing countries. It means the hardware has improved but the system which operates the hardware still lives in the past. This stigmatizes our society as a ‘Brutal Society’.

Front page  http://laborhealth.or.kr/41059

Preface of   Click

Table of Contents

1. Fall to sea! Why didn’t they call 119 ?  click 

2. “Wish I could remove the word of ‘suicide’ covered with my husband” click 

3. 13 deaths within a year at the ‘death factory’… what happened? click

4. [Infographic] People in the ‘hell ship’, how were they killed? click

5. ‘Shipyard ghost story’, the same death in 2014 as 1994 again? click

6. Head opened, leg broken.. No Worker’s Compensation! click

7. Blowing the whistle “How did I blackmail them?” click

8. ‘Smashing’ subcontracting companies, ‘choking’ workers  click

9. “Occupational injury?” You didn’t call 119, did you?  click

10. “Nobody stops running on a single log bridge” click

11. “What is should be like… what it really is like”   click

12. ‘Old’ blacklist, still valid?  click

13. “Jeong Mong-joon is coming to HHI to collect bills”  click

14. Pyramid contract ‘Mul-yang team’, causes death   click

15. Norwegian Press reported ‘Hyundai Heavy Industry Worker’s fatality’… 

     “Shocking information” click