LS Cable & System, a unit of LS (006260) that had gone 37 years without a work stoppage since its union was founded in 1989, has launched its first strike. As generous performance payouts at chipmakers such as Samsung Electronics and SK hynix push up expectations across organized labor, labor-management conflict is spreading to industries that had long maintained a no-strike record.
The LS Cable & System union, affiliated with the Federation of Korean Trade Unions, held a strike rally on the 16th at the company's plant in Gumi, North Gyeongsang Province, with about 500 members attending, according to industry sources. Including those who did not attend, some 800 union members staged partial strikes in three one-hour rounds that day at the Gumi and Donghae plants, the latter in Gangwon Province.
The union argues that workers deserve commensurate rewards because company earnings have grown on the back of a boom in power infrastructure driven by the artificial intelligence rush. In this year's wage and collective bargaining talks, the union demanded a 6.5% increase in base pay, while management held to a 4% increase, the same as last year. The gap on performance pay is also wide, with the union seeking 30 million won and management offering 8.5 million won.
LS Cable & System posted revenue of 4.5232 trillion won and operating profit of 238.4 billion won in the first half of this year, but says it cannot fully accept the demands because of the burden of buying raw materials such as copper and the need to fund about 2 trillion won in facility investment in North America.
Similar situations are unfolding in the steel and shipbuilding sectors. As the chip industry's exceptional performance payouts emerge as a benchmark for industry as a whole, unions demanding large-scale compensation and companies citing rising costs and a slowing market are at an impasse.
The POSCO union began a second partial strike at 7 a.m. on the 16th on some lines in Pohang and Gwangyang. After wage talks broke down, it staged a first partial strike totaling 48 hours from the 9th of this month, and when management failed to present an improved offer, it extended the strike to 120 hours, sharply raising the pressure. The union has demanded a 7.1% increase in base pay and an incentive payment equal to 600% of monthly pay, while management has offered a 2% base pay increase and a target-achievement incentive of 3.5 million won. POSCO says its first-half operating profit fell 43% from a year earlier, while the compensation the union is seeking amounts to 1.4 trillion won, twice last year's level, which the company considers excessive.
The union at HD Hyundai Heavy Industries (329180) also extended its partial strike from four hours a day on the 11th, 14th and 15th to seven hours starting on the 16th. The union demanded a 149,600 won increase in base pay and a 100% increase in bonuses, while management offered a 110,000 won base pay increase and an incentive of 200% plus 10.5 million won, leaving the two sides far apart. The Hanwha Ocean (042660) union also rejected management's offer of a 95,000 won base pay increase, has alternated between full and partial strikes, and has signaled joint strike action after the Chuseok holiday.
