- Korean shipping hub Busan feels aftermath of Hanjin downfall
- Distressed company owes $39 million to local service providers
A group of companies in South Korea’s port city of Busan said about 11,000 jobs are at risk if the troubled container line Hanjin Shipping Co. isn’t rescued.
With no Hanjin ship berthing at its terminal in Busan, the world’s fifth-busiest port, the city’s shipping industry is headed for a crisis, Lee Seung Kyu, chairman of Busan Port Development Association said. About 1,000 tractor drivers are unemployed, and many contractors may be forced to shut down their businesses, said Choi Chul Hee, a port executive. Hanjin handles about 50 percent of the facility’s container volume, he said, dealing a blow to an industry that accounts for 30 percent of the city’s economy.
“The lost volume will find its way to China and Busan will lose its competitiveness,” said Choi. “The economy of Busan will be hit if Hanjin Shipping fails.”
Some companies that provide services to Hanjin Shipping and their workers haven’t been paid a total 42 billion won ($39 million), while about 10 percent of the 10,000 workers at the port haven’t received their wages for about three to four months, according to Kim Young Deuk, president of Eastern Marine Service Co. and also the head of Busan Marine Industry Association. Hanjin Shipping declined to comment.
‘Only the Start’
About 110 workers hired by Hanjin’s contractors got letters terminating their employment by the end of this month, said Song Deuk Hwan, a union leader at Busan’s new port with about 200 members.
“This is only the start,” he said. “The big concern is what will happen now. If nothing is done, more people will lose their jobs and more people won’t get paid.”
Hanjin Group, the parent headed by Chairman Cho Yang Ho, said Tuesday that it will inject 100 billion won ($92 million) to revive the company while the court weighs all options. The government estimates it needs more than 600 billion won to cover unpaid costs like fuel and to unload cargo from its stranded ships.
Wearing red bandannas and waving white placards, about 500 angry shipping workers from Korea’s southeastern industrial city of Busan converged in front of Korean Air Lines Co. headquarters in downtown Seoul Wednesday. Their rally cry: “Save Hanjin! Save Busan!” Korean Air is Hanjin Shipping’s biggest shareholder.