POSCO is facing a strike crisis after failing to find common ground with the POSCO Labor Union in this year's wage and collective bargaining negotiations. The union has already warned of a partial strike next month. Because POSCO has agreed to continue talks with the union, a last-minute settlement is still possible. However, the two sides have struggled to narrow their differences, and whether a partial strike goes ahead is expected to become a test of the labor-management communication skills of Chairman Chang In-hwa and other top executives. POSCO said it will keep talking with the union to reach an agreement while also setting up an emergency response system to minimize any damage to the industry if a partial strike occurs.
According to POSCO and the steel industry on the 25th, the POSCO Labor Union filed a notice of industrial action on the 21st with the National Labor Relations Commission and the Pohang and Yeosu branches of the Ministry of Employment and Labor. The move followed the suspension of mediation after labor and management failed to produce a satisfactory agreement through wage and collective bargaining talks, and after they could not bridge their differences at the final mediation meeting on the 18th. The union held a vote among members from July 8 to 9, and industrial action was approved with 92.2% support.
In the wage and collective bargaining talks, the POSCO Labor Union is demanding a 7.1% increase in base pay, a 600% performance bonus, and 50 shares of employee stock. POSCO, meanwhile, has offered a 1.2% base pay increase and a 2 million won incentive for meeting targets. The company says it cannot accept the union's demands. If the union's original proposal were accepted in full, it would cost at least 1.4 trillion won, which POSCO says would be a burden given this year's operating profit outlook.
POSCO's separate operating profit for the first half of this year came to 490 billion won, down 43.3% from a year earlier. The decline was driven by weaker profits in its core steel business, hit by oversupply from China and sluggish domestic demand. During negotiations, POSCO proposed a revised package that included a 1.5% base pay increase without target conditions, a 2.5 million won incentive, 2 million won in holiday bonuses per year, an additional 300,000 won in welfare points, and measures to improve employee welfare infrastructure through a joint labor-management task force. However, it was unable to reach a deal with the union.
POSCO has maintained labor relations without a strike for 58 years since 1968. If the union carries out the partial strike it has warned of next month, that long-standing no-strike record will be broken. Steel is often called the rice of industry because it is used across major domestic sectors, including automobiles, construction, and shipbuilding. That is why the industry is closely watching whether POSCO will face a partial strike. Some in the industry say next month's decision will be a test of Chairman Chang In-hwa and other top executives' ability to communicate with labor. If a partial strike leads to damage across the industrial sector, it could become a burden for both labor and management.
The POSCO Labor Union is reportedly keeping the door open for negotiations despite the Central Labor Commission's decision to suspend mediation, while preparing to move ahead with phased industrial action. POSCO also plans to seek ways to block a partial strike through behind-the-scenes talks with the union. In other words, the possibility of a last-minute labor-management settlement has not disappeared entirely. Still, the union has announced a press conference and rally for the morning of August 31 in front of the Ministry of Employment and Labor building in Sejong City, where it plans to accuse POSCO of violating labor standards. Analysts say that could make quiet back-channel talks more difficult.
A POSCO official said, "We plan to continue communicating with employees, including the union, about the difficult realities of the business environment. Even if industrial action occurs, we will do our utmost by setting up an emergency response system so that it does not affect major domestic and overseas industries such as automobiles, shipbuilding, construction, and home appliances."
Se Hyung Kim, fax123@sportschosun.com
This article has been translated by GripLabs Mingo AI.
