The labor-management conflict sparked when Hyundai Steel decided in Jan. to shut down part of a production plant at the Incheon works has moved toward a settlement. Although the union strongly protested at the time of the shutdown decision, staging sit-ins at the plant and headquarters, the two sides agreed through talks to carry out voluntary retirement and personnel redeployment.
According to the steel industry on the 2nd, Hyundai Steel plans to announce personnel moves on the 3rd following the shutdown of the Incheon small rebar plant. The targets are about 50 technical workers who wished to be reassigned to the Dangjin plant. It comes about two months after the decision in Jan. to shut down the 90-ton (t) electric arc furnace steelmaking facility and the small rolling mill that produce rebar.
The number of employees initially subject to reassignment due to the facility shutdown is about 200. Hyundai Steel minimized the number sent to the Dangjin plant through in-plant redeployment at the Incheon works and voluntary retirement. Hyundai Steel plans to provide those reassigned to the Dangjin plant with 10 days of consolation leave, up to 3 million won in moving expense, and 6 million won in settlement support, among other benefits.
Voluntary retirement, for which applications were accepted through the 23rd of last month, drew a little over 10 applicants. Hyundai Steel will pay voluntary retirees a consolation payment equivalent to about three years of annual salary. Separately from severance pay, it will also provide 10 million won per child (up to three) in tuition support. For employees age 55 or older nearing retirement, the company decided to pay two months of wages and 11 don of gold.
For the small number of employees who did not opt for voluntary retirement or reassignment, labor and management are holding talks to ensure appropriate personnel placement. However, management did not accept the union's demand at the time of the shutdown for investment in the Incheon plant. Hyundai Steel said investment for safety and maintenance is possible, but new investment is difficult given the currently uncertain market conditions.
With the conflict over the Incheon plant's facility restructuring settled, Hyundai Steel is expected to accelerate production efficiency. The Incheon plant's 90t electric arc furnace steelmaking facility and small rolling mill, completed in 1994, are known to be less efficient than competitors' facilities where production automation has been implemented. As a result, operations were halted from early this year, and facility operators also stopped work.
Although Hyundai Steel's total rebar production will decrease from 3.35 million t to 2.6 million t due to the shutdown, the company stressed there will be no impact on supply. "The production line in question already had a very low operating rate, so it accounted for a small share of supply," a Hyundai Steel official said, adding, "Raising operating rates at other plants will have a significant effect on improving fixed costs."