POSCO Faces First Strike in 58 Years as Wage Talks Reach Breaking Point
South Korea's POSCO is on the verge of a historic labor showdown, with its union preparing for a 48-hour partial strike that could end the steelmaker's 58-year record without a labor dispute.
The POSCO union said Tuesday that it would begin industrial action on September 9 if management fails to present an improved offer before the deadline. The announcement follows months of increasingly tense wage negotiations between the company and its workers.
The union's planned action would target selected production facilities rather than immediately shutting down POSCO's entire operation.
According to The Korea Times, workers plan to halt production lines at the pickling plant at the Gwangyang steelworks and the 3ZRM cold-rolling mill at POSCO's electrical-steel plant in Pohang for 48 hours.
A 58-year record is now at risk
POSCO was founded in 1968 and has maintained an extraordinary record of operating without a labor strike.
That record is now under its most serious threat.
The union obtained the legal right to strike after South Korea's National Labor Relations Commission ended mediation on August 18, determining that the differences between labor and management were too difficult to bridge. A subsequent union strike vote received overwhelming support, with roughly 92% of participating members backing industrial action.
The union has continued negotiations despite securing the right to strike, but the two sides remain far apart on compensation and workplace issues.
Union wants 7.1% wage increase
At the center of the dispute is a substantial difference in wage demands.
The union is seeking:
- A 7.1% increase in base wages
- Incentive payments equivalent to 600% of base pay
- 50 shares through an employee stock-ownership plan
- Holiday bonuses worth 200% of base pay
The union says the negotiations are about more than salary. It has also raised concerns about staffing shortages, long working hours, workplace safety and employee welfare.
Management's latest proposal is significantly lower.
POSCO has offered a 2% base-wage increase, a 3.5 million won performance incentive and a 500,000 won local gift voucher, along with expanded service-anniversary benefits.
That leaves a substantial gap between the two sides.
POSCO says meeting union demands could cost 1.4 trillion won
POSCO has warned that accepting all of the union's demands would cost approximately 1.4 trillion won.
The company argues that the timing is particularly difficult because the global steel industry is facing weak demand, excess production from China and increasing trade barriers and tariffs.
The company has also said it intends to continue communicating with the union while preparing an emergency response system designed to minimize any disruption to customers and major industries.
Those industries include automobiles, shipbuilding, construction and home appliances, all of which rely heavily on steel.
POSCO CEO steps in as deadline approaches
The seriousness of the dispute became even clearer last week when POSCO CEO Lee Hee-keun canceled a planned trip to the United States to focus on the labor negotiations.
Lee had been scheduled to attend a groundbreaking ceremony for the Hyundai-POSCO Louisiana Steel project but decided to remain in South Korea as the labor dispute intensified.
Lee has urged employees and the union to consider the company's longer-term competitiveness, pointing to pressure from low-priced Chinese steel and growing protectionism in global markets.
The intervention has yet to produce a breakthrough.
The union says the door to talks remains open
Despite announcing the strike, the union has not completely closed the door on negotiations.
Yonhap reported Tuesday that both sides continued last-minute efforts to find common ground, even as the union maintained its plan for a 48-hour partial strike beginning September 9.
The Korea Times likewise reported that the union would proceed unless POSCO changes its position, while the company says it remains committed to reaching an agreement.
That means the situation could still change before the planned walkout.
A bigger question for South Korea's steel industry
The dispute comes at a sensitive moment for South Korea's steel industry.
POSCO is dealing with a difficult global market while simultaneously pursuing major investments and new growth opportunities. A prolonged labor dispute could add another layer of uncertainty for a company whose products feed into some of South Korea's most important manufacturing industries.
For workers, however, the dispute reflects concerns over compensation and working conditions that they say cannot simply be postponed because of difficult market conditions.
The two sides therefore face a difficult balancing act: workers want stronger compensation and workplace improvements, while management is warning that the global steel market is becoming increasingly challenging.
The clock is ticking
POSCO's 58-year no-strike record is now hanging by a thread.
Unless management and the union reach an agreement, the first partial strike in the company's history is scheduled to begin September 9 and last 48 hours, with the union warning that further action could follow if the dispute remains unresolved.
For a company that has gone nearly six decades without a strike, the next few hours could determine whether that extraordinary record survives.
The question is no longer whether tensions are high. The question is whether POSCO and its workers can find a deal before the walkout begins.