[COVER STORY] Labor rigidity hinders Korean shipbuilders' ability to take more orders

Korean shipbuilders are facing challenges in expanding their production capacities, despite having order books that extend years into the future. The primary obstacle they encounter is not related to technology or infrastructure, but rather labor issues. Hiring workers swiftly enough to take advantage of increased orders proves difficult for them, as Korea's employment practices are inflexible.

This rigidity, coupled with the cyclical nature of the industry, complicates workforce planning for shipbuilders. When they aggressively hire during periods of booming orders, they often find themselves burdened with excess labor costs once demand declines, leading to caution when expanding their permanent workforce.

Amidst these difficulties, Korean shipbuilders are facing competition from their Chinese counterparts, who are swiftly increasing their capacity. Domestic industry officials express concern that China's growing shipbuilding experience might diminish Korea's technological edge, as Chinese shipyards build more vessels and refine their technical capabilities.

An industry official noted, "As shipbuilding is a cyclical industry with large swings between booms and downturns, flexibility is needed to adjust production capacity in line with market conditions."