100 Days of Unauthorized Occupation of Hyundai Steel President's Office... Warning of 'Guerrilla Strike' (Comprehensive)

Union Begins Strike Discussions After Failed Labor Negotiation
Strike Becomes Realistic with Securing Right to Dispute
Management Struggles to Find Solutions Amid Concerns Over Poor Performance

Union members affiliated with Hyundai Steel are occupying the office of President Andongil located in the control center of the Dangjin Steelworks and staging a sit-in protest.

[Asia Economy Reporter Oh Hyung-gil] The labor union of Hyundai Steel, which has been occupying the president's office without permission for 100 days, is warning of a "guerrilla strike," deepening the conflict between labor and management. The gap that began over the payment of special incentive bonuses has extended into wage negotiations, with no clear resolution in sight.

According to industry sources on the 9th, Hyundai Steel's five branches under the National Metal Workers' Union (Dangjin, Incheon, Pohang, Suncheon, Dangjin Hysco) and management plan to hold the 10th round of wage collective bargaining negotiations on the 11th. However, the 8th and 9th negotiations held on the 28th of last month and the 4th of this month were canceled due to management's absence, pushing the situation toward a potential strike.

The five branches stated in their propaganda bulletin "Negotiation News" that "Although we strongly desire to stop the steelworks immediately, we will endure for an efficient and impactful struggle," adding, "The guerrilla strike will be cautious and sudden." It is reported that internal discussions on the timing and targets of the strike have begun within the union.

Since May 2, the Hyundai Steel union has been occupying the president's office at the Dangjin Steelworks without permission, continuing their sit-in. From May 3, union members at the Incheon, Pohang, and Suncheon plants have also occupied the plant managers' offices.

The labor-management conflict at Hyundai Steel was triggered by special incentive bonuses within the group. While employees of other group affiliates such as Hyundai Motor received a special incentive bonus of 4 million KRW last year based on business performance, Hyundai Steel workers demanded the same bonus, arguing that last year's record-high performance was due to Hyundai Steel's sacrifice in suppressing cost increases for the affiliates.

However, management has taken a firm stance against further negotiations, stating that they have already raised the base salary by 75,000 KRW and paid performance bonuses (200% of base salary plus 7.7 million KRW) through wage negotiations. With this year's wage and collective bargaining talks underway, the conflict shows signs of prolonging.

Last month, the five branches conducted a strike authorization vote among their members, receiving overwhelming support with 94.18% in favor. On the 25th, they secured the right to strike by obtaining a decision to suspend mediation from the Central Labor Relations Commission, meaning they can legally initiate a strike at any time.

The intensity of the struggle is expected to escalate gradually, but management has yet to find a viable solution. Although normal operations are disrupted due to the occupation of the president's and plant managers' offices, no significant damage has occurred.

The union has been reported to the police for special trespassing, obstruction of business, and property damage, but only investigations are underway, and the likelihood of law enforcement intervention remains low. Unlike the strike situation at Daewoo Shipbuilding & Marine Engineering subcontractors, there are no signs of government or political mediation efforts, suggesting a difficult road ahead.

As the labor-management conflict drags on, Hyundai Steel's concerns deepen. According to financial information firm FnGuide, Hyundai Steel's operating profit consensus for the third quarter has dropped 11.2% from 619.7 billion KRW two months ago to 550.2 billion KRW, a 33.4% decrease compared to the same period last year.

Price declines for major products in the second half are also becoming a reality. Hyundai Steel recently stated in its Q2 earnings conference call that a price reduction for heavy plates in the second half is inevitable. Kim Jeong-han, head of Hyundai Steel's Heavy Plate Division, said, "Due to the Russia-Ukraine situation and the recent strike, demand from shipbuilders in the second half is expected to decrease more than anticipated, and heavy plate market prices are falling," adding, "A price drop for heavy plates in the second half is unavoidable."

An industry insider commented, "The union will likely raise issues starting with performance bonuses during the wage negotiations, and it seems unlikely that negotiations will progress normally," adding, "The government should intervene or deploy law enforcement to prevent the situation from escalating into a strike."

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