According to industry sources on May 20, Lotte Chemical and HD Hyundai Chemical will officially launch the spinoff company, tentatively named Lotte Daesan Petrochemical, on June 1. Employees from Lotte Chemical's Daesan plant in Seosan, South Chungcheong Province, will initially transfer to this new entity.
The integration process with HD Hyundai Chemical is expected to be completed by September 1, finalizing the transition to a new joint venture structure. This move follows a February agreement between the two companies regarding the restructuring of the Daesan Project.
The Daesan Project aims to consolidate HD Hyundai Chemical, a joint venture between Hyundai Oilbank and Lotte Chemical, with Lotte Chemical's Daesan plant. The goal is to enhance the competitiveness of the struggling petrochemical business through joint operations and process efficiencies.
Regarding employment, the principle of 100% retention will be upheld. Employees of Lotte Chemical who are part of the integration will maintain their existing employment relationships without layoffs, and their salaries, allowances, benefits, and promotion systems will remain unchanged. Annual leave and seniority will also be recognized.
However, concerns persist among employees about future workforce management and treatment systems. The most sensitive issue is the difference in employment structures between Lotte Chemical and HD Hyundai.
While Lotte Chemical employees will fully transition to the integrated corporation, personnel from Hyundai Oilbank and HD Hyundai Chemical will work in the new entity for four to five years before returning to their original companies.
This structure has raised concerns about fairness, particularly since Hyundai Oilbank's wage and benefit levels are relatively higher, potentially leading to disparities even within the same operations.
Additionally, the dispatch system for HD Hyundai Chemical personnel may pose labor risks. If employees maintain their formal affiliations while working in mixed operations, it could lead to allegations of illegal dispatch.
An industry insider noted, "As we are still in the early stages ahead of the integrated corporation's launch, specific details regarding workforce reallocation or wage and benefits systems have not been finalized. However, given that employees from different companies are merging into one organization, some issues regarding workforce management and treatment are inevitable."
* This article has been translated by AI.
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