[Column] POSCO Holdings' Establishment in Seoul Should Not Become a Political Issue

Presidential Candidates Visit Pohang and Raise POSCO Holdings Location Issue on SNS
Political Influence on Private Company Decisions
Should Not Become a Political Controversy

[Asia Economy Reporter Jeong Dong-hoon] "The decision to establish POSCO headquarters in Seoul goes against the pioneering spirit of the late Honorary Chairman Park Tae-joon and the historical mission as a national enterprise. (Lee Jae-myung, Democratic Party candidate)"

"It is opposed that the national enterprise POSCO sets up its holding company in Seoul, as it goes against balanced regional development. (Yoon Seok-youl, People Power Party candidate)"

The location of the holding company ‘POSCO Holdings,’ which will be launched on the 3rd of next month, is fueling conflict between the presidential candidates of the two major parties. When politicians and civic groups in the Pohang region strongly opposed the decision to locate POSCO Holdings in Seoul, fearing the outflow of local tax revenue and workforce as well as exclusion from new business investments, the candidates echoed these concerns in unison. This is quite different from their campaign promises to respect market and corporate decision-making throughout the election period. Such remarks raise concerns as they may be misunderstood as having an economic perspective reminiscent of the planned economy era of the 1970s.

The presidential candidates’ eagerness to debate private corporate decisions is interpreted as an attempt to win votes in the Gyeongbuk and Pohang regions. But will the establishment of POSCO Holdings in Seoul really have a negative impact on the Pohang regional economy, as they claim? The total workforce of the newly launched POSCO Holdings is about 200 people. According to POSCO, there will be no outflow of personnel that local governments worry about. Only some employees will be transferred to the holding company, while the separated POSCO headquarters will remain in Pohang. The concern that investment in the Pohang region will decrease is also unfounded. POSCO Chemical is establishing a factory in Pohang this year capable of producing 60,000 tons annually of cathode materials, a core component of secondary batteries. This accounts for about 57% of the cathode materials produced by POSCO Chemical this year. Since clustering is important for secondary battery factories, further factory expansions can also be expected in the future.

POSCO launched the holding company system for the first time in 54 years to focus on eco-friendly future businesses based on its globally competitive steel industry. POSCO Holdings and the Future Technology Research Institute, which will be located in Seoul, are expected to play central roles in research and development (R&D) and corporate investment going forward. As competition for securing talent intensifies among companies in fields such as secondary batteries and hydrogen, establishing the holding company in Seoul is a managerial decision for the company’s future to recruit high-level personnel. The repeated interference in POSCO’s management by political regimes even after privatization must end. POSCO is a company standing on the foundation of historical hardship. The decision-making power of a company painstakingly built should not be exploited for votes just before an election.

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