POSCO Talks Stall Despite Higher Wage Offer

A view of the Pohang Steelworks in Nam-gu, Pohang, North Gyeongsang Province, on Sept. 16, when the second partial strike by the POSCO labor union was underway. [Yonhap] POSCO labor and management resumed wage negotiations after a month but failed to find common ground. The management increased the base salary hike rate and added a lump sum and a special wage adjustment plan, but the union countered that it was still insufficient. As the first main negotiation since Union President Kim Sung-ho secured his third term also fell through, the labor-management conflict stands at the crossroads of a third partial strike. POSCO labor and management held the main negotiation for this year’s wage agreement for about 1 hour and 20 minutes at the Pohang headquarters on the afternoon of Oct. 14, but failed to reach a tentative agreement. This comes about a month after negotiations were suspended on Sept. 15. Prior to this main negotiation, the two sides held three working-level negotiations on Oct. 7, Oct. 8, and Oct. 13, but reportedly showed differences of opinion on key issues. This negotiation was the first main negotiation held since Chairman Kim succeeded in winning a third term in the 21st chairman election on Oct. 2. On this day, Senior Vice Chairman Cho Yang-rae attended as the representative for the union. The management presented an additional proposal that advanced from the previous one on this day. They raised the base salary increase rate by 0.2%p from the existing 2.0% to 2.2%, and increased the lump sum by 500,000 won (about $373) from 4,000,000 won to 4,500,000 won. The lump sum consisted of a goal achievement encouragement bonus of 3,500,000 won, local currency vouchers worth 500,000 won, and an agreement celebration bonus of 500,000 won. As a morale-boosting measure, they newly proposed a special wage adjustment plan equivalent to one pay step for those employed as of April 10 this year. This is equivalent to a fixed amount of 26,210 won per month, which the union views as having the effect of a 0.6% increase in the base wage. The holiday welfare points were also increased from the previous 300,000 won to 400,000 won per year. The congratulatory money for long-term service was increased by 100,000 won to 300,000 won per section compared to the past, and welfare plans such as expanding the target of medical expense support, supporting infertility treatment and children with disabilities, and improving housing loan standards were also included. However, looking only at the base salary increase rate, the gap between labor and management remains large. While the management proposed 2.2%, the union is demanding a 7.1% increase. In addition, the union is also demanding a 600% encouragement bonus, 50 shares of the Employee Stock Ownership Plan, and a 200% holiday bonus, showing a significant difference in positions regarding the overall conditions. The union also acknowledged that the management’s proposal had made some progress compared to before. Senior Vice Chairman Cho said during the negotiation, “I acknowledge that the morale-boosting plan presented by the company today has taken a difficult step forward,” but added, “For this year at least, a proposal must be presented that fully reflects the hard work in the field and the weight of the sacrifices endured so far.” Previously, the POSCO labor union consecutively held a 48-hour first partial strike and a 120-hour second partial strike in November due to difficulties in wage negotiations. Afterward, they suspended strikes and negotiations during the executive election period, and reorganized the Dispute Countermeasure Committee after Chairman Kim’s third election win. The union’s position is that they may embark on a third partial strike of a larger scale than before if the company does not present a substantial additional proposal or delays negotiations. Although the timing of the strike and the targeted processes have not yet been decided, the possibility remains that the level of dispute will rise again as they failed to find an agreement in this main negotiation as well. The company’s position is that the proposal presented on this day is the maximum level it can bear under current management conditions. A POSCO official stated, “We have delivered an advanced proposal in a situation where the slowdown in global demand and the oversupply and low-price offensive from China continue,” adding, “We will do our best to reach a reasonable agreement by forming a consensus with the union regardless of formalities such as working-level negotiations and main negotiations.” Senior Vice Chairman Cho said, “Right now, there are loud voices in the field saying that we must immediately go on a dispute,” but noted, “As it is our responsibility to deliver practical results to the union members, we will do our best to reach a settlement through dialogue until the end.” He then added, “The management must not take this patience lightly.”