POSCO's tradition of remaining strike-free since its founding in 1968 has entered a precarious phase this year. Amid a prolonged downturn in the steel industry, issues including holding-company dividends, wages and welfare, and the direct employment of subcontractor workers have emerged as points of labor-management conflict, with both prime-contractor and subcontractor unions escalating strike pressure.
According to industry sources on the 15th, POSCO management and the regular workers' union, the POSCO Labor Union under the Korea Metal Workers' Federation of the Federation of Korean Trade Unions, held a fifth round of negotiations the previous day but failed to reach an agreement. Since their first meeting on the 12th of last month, POSCO management and labor have held four earlier rounds of talks but have not narrowed their differences.
The two sides plan to continue negotiations, but observers say that if the deadlock drags on, they could in the worst case move toward a strike. In a vote held on the 8th and 9th of this month on industrial action related to this year's collective bargaining, POSCO's regular workers' union secured 92.2% approval from members. The union plans to apply for mediation with the National Labor Relations Commission if negotiations break down, in order to secure the right to industrial action.
The POSCO union has broadly raised complaints about the company's management structure and the way crisis burdens are being shared since the physical spin-off. The union argues that the criteria for dividends transferred to the holding company, POSCO Holdings, are not being sufficiently shared, and that funds that should be used for investment to overcome the crisis in the steel industry are being transferred to the holding company. POSCO paid POSCO Holdings dividends of 888 billion won in 2024 and 527.4 billion won last year.
On wages and welfare, the POSCO union delivered a set of demands to management in May, including a 7.1% increase in base pay, a lump-sum payment equal to 600% of wages, and improvements to welfare programs.
The phased direct employment of about 7,000 subcontractor support workers at the Pohang and Gwangyang steelworks is also a key issue in this year's wage and collective bargaining. The union applied for mediation with the National Labor Relations Commission, citing concerns over deteriorating conditions and reduced performance-based pay for regular union members resulting from the direct employment of subcontractors, but received an administrative guidance ruling in May that the matter did not qualify as a subject of industrial action. The POSCO union says it is not opposed to direct employment itself, but takes issue with the company pushing ahead with the plan without sufficient prior consultation and consensus-building.
Subcontractor unions are also increasing strike pressure. Since the so-called Yellow Envelope Act, which took effect in March, recognizes the employer status of prime contractors, POSCO subcontractor unions are demanding direct negotiations with the prime contractor. The plant construction union, alleging unfair labor practices by POSCO, announced it would join a general strike on the same day.
