POSCO to Begin Partial Facility Shutdown Starting the 16th

Employees of closed factories receive 70% of average wages

[Asia Economy Reporter Hwang Yoon-joo] POSCO is entering partial shutdowns due to the impact of the novel coronavirus infection (COVID-19). This is an additional measure to overcome the worsening business conditions, separate from flexible production cuts.

A POSCO official stated, "Starting from the 16th, we have decided to implement paid leave (flexible operation) for production facilities where some downtime will occur, such as the Pohang Steelworks and Gwangyang Steelworks." The temporary shutdown also includes the 2nd hot rolling mill at Pohang Steelworks, which was scheduled for major maintenance in June.

For factory workers affected by facility downtime and subject to shutdown, POSCO will conduct training and POSCO-style QSS (quick six sigma) activities. Additionally, for factory workers experiencing facility downtime of more than three days, POSCO plans to pay 70% of their average wages during the shutdown period in accordance with the Labor Standards Act.

Earlier, POSCO postponed the restart of Gwangyang No. 3 blast furnace, which had completed maintenance last month. Although it was originally planned to restart in June, it is now expected to be delayed until September. Through this, POSCO expects to effectively achieve production cuts.

POSCO’s decision to postpone the restart of Gwangyang No. 3 blast furnace and temporarily halt other facilities is based on the judgment that the impact of COVID-19 on the steel industry will intensify starting from the second quarter. In the first quarter, when the domestic and international COVID-19 situation peaked, front industries such as automobile factories were directly hit by shutdowns, and the resulting effects on sales and marketing have reportedly been felt since last month.

Overseas steel companies are also suspending blast furnace and production facility operations and restructuring their workforce. Nippon Steel is implementing unpaid leave twice a month until March next year.

This content was produced with the assistance of AI translation services.