The mass retirement of the so-called baby boomer generation born between 1955 and 1963 has become a major concern for the manufacturing industry. A survey by the Chosun Ilbo at Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering, POSCO, Hyundai Motor and Doosan Heavy Industries shows that the number of retiring workers is expected to more than double over the next three to four years.
At Hyundai Heavy, the number of retirees will rise from 950 in 2010 to 1,102 in 2014. The situation is worse at Hyundai Motor's main Ulsan plant (230 to 510), Daewoo (92 to 364) and Doosan (95 to 190).
The business community sees this as a looming crisis for Korea's manufacturing competitiveness. This is especially true for the shipbuilding industry, where the skills of individual workers determine the quality of welding and other tasks. The skills of veteran Korean shipbuilding industry workers rank at the top of the global industry and are responsible for propelling Korea to the top. If these veterans retire en masse and are replaced by inexperienced workers, the country's shipbuilding industry could suffer a crisis.
Major conglomerates have already raised the retirement age from the mid-50s to at least 58, and Hyundai Motor and Hyundai Heavy came up with a new policy of allowing veteran retired workers to work one more year on contracts.
The situation is even more desperate in small and mid-sized businesses. Big conglomerates can try and replace veteran workers through training at educational centers or subcontracted companies. But SMEs lack the resources to do that, so they are either scrapping the retirement age limit or extending it.