Hyundai Steel announced on the 14th that it will enter into an emergency management system. Hyundai Steel has been conducting main negotiations for the 2024 wage and collective agreement (labor-management negotiations) with the labor union 23 times since September last year but has not reached an agreement. The labor union is demanding the highest level of performance bonuses within the group, but management is refusing to accept this due to worsening business conditions. The labor union is conducting strikes, which are causing disruptions in cold-rolled production.
On this day, Hyundai Steel declared the entry into the emergency management system and decided to implement cost-saving measures such as a 20% salary cut for all executives and minimizing overseas trips. Additionally, the company is considering receiving applications for voluntary retirement from all employees and plans to pursue extreme cost reduction measures in various ways. The company explained that this was a measure taken based on the judgment that it would be difficult to improve management without strong self-rescue measures in the crisis situations domestically and internationally.
Previously, Hyundai Steel has reduced operations at its Pohang Plant 2 due to the sluggish business conditions caused by the decline in the domestic construction market. It is currently accepting applications for voluntary retirement among technical staff at the Pohang Plant and for transfer placements to the Dangjin Steelworks in South Chungcheong Province and the Incheon Plant until this day. The company explained that the anti-dumping lawsuit against imported hot-rolled plates and products was also an effort for survival against the low-cost steel offensive from China and Japan.
Hyundai Steel has noted that it is experiencing difficulties in wage negotiations with the labor union, which has continued since September last year amid this crisis. Hyundai Steel proposed a performance bonus plan of 26.5 million won per person (450% of the basic salary plus a fixed amount of 10 million won) while accepting a management performance deterioration of a net loss of 65 billion won based on 2024, but the labor union rejected this and continued to strike while demanding additional performance bonuses.
A representative from Hyundai Steel said, "The labor negotiations resumed on the 13th, but we could not find a point of agreement and the negotiations broke down. Given that labor-management conflicts are expected to persist in the future, there are concerns that this could inevitably have negative impacts on the domestic industry."