POSCO's first strike since the company was founded in 1968 became a reality after management and the union failed to narrow their differences in wage negotiations. It is the first time in the steelmaker's 58-year history that its union has halted operations. The company had sought to resolve a long-standing issue by directly hiring in-house subcontract workers, but the regular workers' union pushed back strongly and went ahead with the walkout, drawing considerable controversy.
The POSCO Labor Union, affiliated with the Korean Metal Workers' Trade Union Federation (KMWF) under the Federation of Korean Trade Unions, began a 48-hour first partial strike at 7 a.m. on the 9th, running until 7 a.m. on the 11th, according to the steel industry. The move followed the failure to reach an agreement by midnight the previous day, the deadline the union had set for negotiations. About 100 union members in total, 40 to 50 at each of the Pohang and Gwangyang plants, are expected to take part in the strike.
The partial strike covers the 3ZRM reversing rolling mill line at the No. 2 electrical steel sheet plant of the Pohang works and all lines at the pickling plant of the Gwangyang works. The union instructed day-shift and resident workers not to report to their work sites on the 9th, but instead to visit the union office at each mill by 8 a.m. to confirm attendance before returning home.
Reporting for work or filling in for striking workers during the strike is strictly prohibited. The union plans to pay participating members their full lost wages plus compensation of 300,000 won a day. The union leadership, however, has decided not to accept the compensation.
POSCO's management and union had been at odds over wages, performance bonuses and expanded employee benefits. The union has demanded a 7.1% increase in base pay, incentive pay equal to 600% of monthly wages, 50 shares under the employee stock ownership plan and holiday bonuses equal to 200% of monthly wages. Management countered that fully accepting the demands would cost 1.4 trillion won, twice the amount spent a year earlier, and maintained that it could not accept them in full given the deterioration in global steel market conditions.
At the main round of talks on the 3rd, management offered a revised package worth about 4 million won per employee, including a 2.0% increase in base pay, incentive pay of 3.5 million won, 500,000 won in local gift certificates and a wider range of increases in long-service awards. The union rejected the offer and the talks broke down. The union's demand for incentive pay far larger than in past settlements, citing the direct hiring of in-house subcontract workers, has emerged as the biggest obstacle to progress in the negotiations.
The union said it would escalate its action further unless management presents an offer that meets members' expectations. It warned that if no agreement is reached in further talks despite the first partial strike, it will stage a second partial strike lasting 120 hours from the 16th.
The union said it would set up and operate a separate emergency response team during the strike to protect the safety of workers at the sites and residents nearby and to prepare for emergencies. It plans to take essential safety measures in situations requiring immediate action, such as disasters, fires, explosions or injuries.
POSCO says contingency plans, including replacement workers, will keep production at core processes from being disrupted. Still, output setbacks appear unavoidable if the labor dispute drags on and the strike expands.
