Wage negotiations between POSCO and its labor union have broken down, with the union announcing plans for an open-ended strike. The dispute has emerged as a key business risk at a time when higher steel sales and product prices are expected to lift earnings. POSCO said it plans to activate emergency operations.
The POSCO Labor Union, affiliated with the Federation of Korean Metal Workers' Trade Unions under the Federation of Korean Trade Unions, said on the 24th that it will begin an open-ended strike at 7 p.m. on Nov. 2, followed by a phased expansion of the walkout. The two sides held wage talks the previous afternoon but failed to reach an agreement.
The union said the talks collapsed because management did not change its position on the core issues, leaving no room for a deal. The union, which staged two partial strikes last month, plans to build up a strike compensation fund ahead of the open-ended walkout. To that end, it is pushing a plan to collect special dues from members not taking part in the strike.
The two sides remained far apart on key issues including the base pay increase and lump-sum payments. The union demanded a 7.1% rise in base pay, incentive pay equal to 600% of monthly salary, 50 shares under the employee stock ownership plan and holiday bonuses equal to 200% of monthly salary. In recent talks, the company offered a 2.5% increase in base pay and a lump-sum payment of 5 million won.
The strike notice comes as profitability in the steel business is expected to recover. According to financial data provider FnGuide, POSCO Holdings is forecast to post third-quarter consolidated revenue of 18.6394 trillion won and operating profit of 812.7 billion won, up about 8% and 27% respectively from a year earlier. Analysts attribute the gains largely to higher steel sales at POSCO and rising prices for automotive steel sheets and thick plates used in shipbuilding. Despite higher input costs for raw materials, average selling prices rose by a wider margin, improving profitability, according to analysts.
POSCO said that if the union proceeds with industrial action, it will adjust production plans and activate an emergency operating system to minimize the impact on customers and domestic industries that depend on its steel. "Despite the union's declaration that talks have broken down, we will continue dialogue and work to bring the wage negotiations to an amicable conclusion," a company official said.