POSCO Labor and Management Fail to Reach Agreement After Six Rounds of Talks; Strike Looms as Both Sides Vow Last-Ditch Efforts

Wage and Performance Bonus Disputes Continue
Mediation by the National Labor Relations Commission Remains Pending

The labor and management at POSCO have ultimately failed to reach an agreement in this year’s wage negotiations. With the union declaring a breakdown in talks, the dispute process is expected to officially begin.

Exterior view of POSCO Center in Seoul. POSCO

According to the industry on July 23, the POSCO labor union declared a breakdown in the sixth main negotiation session held that day. Since the initial meeting on June 16, labor and management have held a total of six negotiation rounds. However, they have been unable to narrow their differences over the wage increase rate, performance bonuses, and improvements to employee welfare.

The company proposed a 1.2% increase in base salary, contingent on achieving this year’s operating profit target, along with a performance incentive of 2 million won. Additional offers included increased individual awards, more opportunities for special promotions, improvements in the treatment of on-site staff, changes to housing loan criteria, and expanded holiday bonuses for Lunar New Year and Chuseok.

The union, on the other hand, demanded a 7.1% increase in base salary, an incentive payment equivalent to 600%, the distribution of 50 shares to employees through the Employee Stock Ownership Program, application of five years’ worth of natural wage increases, and a holiday bonus of 200%. The company has maintained that it cannot accept these demands, citing difficult business conditions such as the influx of cheap imports from China, expansion of global protectionism, and the challenges posed by high oil prices, high exchange rates, and high interest rates.

Earlier, in a strike vote held from July 8 to 9, POSCO union members approved industrial action with 92.17% of 8,911 voting in favor. However, in order to secure the legal right to strike, the National Labor Relations Commission must issue a ‘mediation suspended’ decision in the dispute resolution process.

Since its founding in 1968, POSCO has maintained a 57-year record of reaching wage and collective bargaining agreements without a single labor dispute, lasting through last year. This year’s negotiations have seen increased conflict since the company announced a roadmap for the direct employment of on-site workers at outsourcing partners in April, with the union subsequently demanding compensation measures. Even before the initial meeting, the union launched a dispute countermeasure committee and has maintained a hardline stance.

The company stated, “We will continue to share information with the union about the management environment currently facing the steel industry and strive to find a reasonable compromise. We will also take thorough measures to ensure that the labor dispute does not affect demand industries such as automobiles, shipbuilding, and home appliances.”

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