GEOJE -- The 51-day sit-in protest by subcontract workers at the Daewoo Shipbuilding & Marine Engineering Co. (DSME) shipyard on the southeastern coast entered a crucial phase Friday, as labor and management were struggling to strike a last-minute deal before the shipyard's two-week summer holiday begins this weekend.

If both sides fail to reach an agreement during the day, the sit-in will likely drag on for a very long period of time, dealing a fatal blow to the world's fourth-largest shipbuilder, government and industry officials said.

The government and police, losing patience with the workers' illegal occupation of one of the shipyard's key facilities, may eventually decide to mobilize law enforcement power to break up the sit-in.

About 120 unionized workers from DSME subcontractors have been occupying an oil tanker under construction at a dock of the global shipbuilder's Okpo shipyard on Geoje Island, about 470 kilometers southeast of Seoul, since June 2, demanding a 30 percent wage hike, and improved working and employment conditions. DSME is said to have suffered an operating loss of more than 660 billion won (US$504 million) from the prolonged strike.

The officials fear a virtual holiday shutdown of the shipyard, where about 20,000 people from DSME and subcontractors work every day, from Saturday to Aug. 7 may have a negative impact on the ongoing labor-management negotiations.

The striking workers and their employers have reportedly reached an agreement on a wage hike but have yet to reach a compromise on other contentious issues, including the withdrawal of a damages suit against strikers and the employment succession of some subcontract workers.

Labor and management representatives had unsuccessfully held marathon talks until late Thursday night and resumed their negotiations around 8 a.m. Friday.

Unlike the previous days, journalists were prohibited from approaching the negotiation venue on the day, indicating the two parties' determination to focus on their talks.

Police are reportedly making various preparations for a possible deployment of police personnel to disband the striking workers, if the labor-management negotiations eventually fall through. (Yonhap)