POSCO on the Verge of Strike for the First Time in 55 Years?… Launch of Gwangyang and Pohang Strike Committees

Union Prepares for First Strike Since Founding
20 Negotiations Held with Management
Last-Minute Wage and Collective Bargaining Talks Fail

On the afternoon of the 7th, about 1,000 members of the POSCO union under the Korean Metal Workers' Union Federation gathered on the road in front of the headquarters in Pohang, Gyeongbuk. The POSCO union shouted, "Remember, the workers are the owners," announcing the launch of the Strike Countermeasures Committee (SCC). This marks the first time in the company's 55-year history that preparations for a strike have begun. The day before, the SCC launch ceremony was held on the road in front of Gate 1 of the Gwangyang Steelworks in Jeonnam.

The SCC is a decision-making body separately formed by the representative bargaining union to carry out strike actions. It creates strike guidelines and notifies management of strike warnings, among other roles. Once the SCC is launched, the usual first step in legal procedures is to apply for dispute mediation with the Central Labor Relations Commission. The POSCO union is also internally reviewing the application for dispute mediation.

If the labor and management sides fail to narrow their differences during the ten-day mediation period at the Central Labor Relations Commission, a "mediation suspension" decision is made, and the union secures the right to strike. A union member vote on whether to strike is conducted, and if the majority agrees, the union reports the strike action to the Central Labor Relations Commission, allowing a legal strike.

On the afternoon of the 6th, the POSCO Labor Union held the launch ceremony of the Dispute Countermeasures Committee in front of the Gwangyang Steelworks in Jeonnam [Image source=Yonhap News]

The union first submitted its bargaining demands on May 3 and began the first negotiation on the 31st of the same month, holding 20 rounds of negotiations with management but failing to find common ground. The union declared the breakdown of negotiations on the last negotiation day, the 23rd of last month, accusing management of showing an insincere attitude toward wage and collective bargaining (wage and collective agreement, WCA).

The union requested management to present proposals twice but received no response. Only after the third request did management submit proposals, but there was no mention of key union demands such as base pay and daily wages. This is the first time since POSCO's founding in 1968 that wage and collective bargaining negotiations have collapsed.

In this unprecedented situation, POSCO Vice Chairman Kim Hak-dong sent an email on the 4th urging employees to refrain from striking. In the email, Vice Chairman Kim said, "I cannot help but feel deep concern about the rapid progress of the WCA process as if goals were set without thorough and sufficient discussion," adding, "If supply disruptions occur, there could be significant penalties due to contract terminations and delayed deliveries."

POSCO Labor Union [Image source=Yonhap News]

The union presented a total of 86 demands to management, including 23 wage-related demands and 63 proposals for amendments to the collective agreement. The union's demands have increased about fourfold compared to last year (around 20 items). The union's wage-related demands included a 13.1% increase in base pay, 100 company shares granted to union members, establishment of a Performance Incentive (PI) system, increased lunch allowances, and the introduction of summer vacation and vacation pay. Management proposed a total of 43 items, including 11 wage-related issues and 32 compromise proposals for collective agreement amendments. A union official described management's proposals as "nutritionally worthless items that we did not even request."

Even if a strike occurs, not all POSCO plants will stop operating. This is because there are "agreed workers" who are not allowed to participate in strike actions under the collective agreement. Processes involving molten metal, such as ironmaking and steelmaking, are restricted from striking under labor law.

A POSCO official said, "If all union demands are accepted, the additional cost would be about 1.6 trillion won, exceeding 70% of the total annual labor cost. This equates to an annual salary increase of about 95 million won per union member, which is an excessive demand."

Kim Jae-yeol, chairman of the POSCO Pohang Steelworks Partner Association, expressed concern, saying, "If the POSCO union continues unreasonable demands leading to a strike, it will adversely affect the already difficult employment and overall working conditions of partner companies."

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