POSCO, Korea's largest steelmaker, saw its 58-year record of "no strikes" broken. The POSCO union began a partial strike at 7 a.m. on the 9th, stopping some production lines at the Gwangyang and Pohang steelworks for 48 hours. Labor and management pulled back and forth over conditions to resume talks right up until the strike, but ultimately failed to narrow differences over the size of the base pay increase and performance compensation.
About 150 of the roughly 10,000 POSCO union members are participating in the strike. The strike targets all lines at the pickling (酸洗) plant at the Gwangyang steelworks and some lines at the No. 2 electrical steel plant at the Pohang steelworks. The Gwangyang pickling plant is the process that treats the surface with hydrochloric acid before sending hot-rolled steel sheets to the cold-rolling process. At the Pohang steelworks, rolling equipment that flattens high-grade electrical steel to a thickness of 0.15 mm is stopping. The union said, "We set the two sites as partial strike targets after comprehensively considering processes with high member participation and a large impact on production."
The war of nerves between labor and management continued until the night of the 8th, the day before the strike. That evening, management sent an official letter to the union proposing, "If you call off the strike, we will enter negotiations." The union said it could not call off the strike first without a concrete additional offer and demanded that an improved plan be presented by midnight. With management not putting forward a separate offer, the union went on strike as planned. It was also reported that tensions flared on site that night when management tried to block some entrances to the strike-targeted plants and the union objected.
POSCO labor and management are at odds over the size of the base pay increase and the amount of a bonus. The union has demanded a 7.1% increase in base pay, a bonus equal to 600% of base pay, 50 shares in the employee stock ownership plan, and a 200% holiday bonus. On the 3rd, management proposed an additional plan for a 2% increase in base pay and a lump-sum payment of 4 million won (3.5 million won in a goal-achievement bonus and a 500,000-won local gift certificate), but they failed to reach an agreement.
POSCO maintains that deteriorating business conditions due to a slump in the steel market make it difficult to accept all of the union's demands. On a separate basis, POSCO's operating profit in the first half of this year was 487.3 billion won, down 43.3% from a year earlier. The company expects that fully reflecting the union's demands would require about 1.4 trillion won in resources.
The union, on the other hand, argues that the shop floor should not bear the burden solely on the grounds of managerial difficulties. It says money earned from the steel business is being paid to POSCO Holdings in the form of dividends, brand royalty fees, and rent, while investment in facilities, safety, and personnel, and employee compensation, are being pushed back. The union also counters that 1.4 trillion won is merely the total of all demands that could be adjusted during negotiations, and that it is not insisting on securing the entire amount.
POSCO believes the immediate impact of this partial strike on overall operations at the steelworks will not be significant. A POSCO official said, "We will deploy substitute personnel during the partial strike to minimize any disruption to production." However, if the strike drags on, production disruptions for cold-rolled and coated steel sheets and electrical steel will be unavoidable. Core processes that require continuous operation, such as blast furnaces (高爐), are designated as "agreement work" to be maintained during strikes under the collective agreement between labor and management, and will continue to operate normally regardless of the strike.
If management's stance does not change, the union plans to carry out a second partial strike for 120 hours starting on the 16th. A union official said, "We plan to expand the number of participants and target processes for the second strike," adding, "If negotiations still make no progress afterward, we will consider a full strike in Oct."