POSCO wage deal rejected, raising prospect of prolonged labor dispute
An aerial view of POSCO's electrical steel plant at Gwangyang Steelworks, Jeonnam-Gwangju Special Metropolitan City / Courtesy of POSCO
POSCO is facing the prospect of a prolonged labor dispute after union members rejected a tentative wage agreement, leaving the steelmaker struggling to reach a deal following the first strike in its history.
The company’s labor union on Sunday said its members had rejected the tentative wage agreement in a vote. Of the 9,177 ballots cast, 4,433 votes, or 48.31 percent, were in favor, while 4,744, or 51.7 percent, were against.
The rejection has cast uncertainty over the next round of negotiations, with the union expected to seek better terms than those included in the failed deal. However, it remains unclear how much management will be willing to concede amid a prolonged downturn in the steel industry.
The two sides began wage negotiations on June 16 and held around 30 rounds of formal and working-level talks, but failed to narrow their differences over pay increases and other compensation.
The union had initially called for a 7.1 percent increase in base pay, a performance bonus worth 600 percent of base pay, 50 shares of company stock for each worker and a holiday bonus worth 200 percent of base pay.
Whereas, management initially offered a 1.2 percent base pay increase if the company met its annual operating profit target, gradually raising the offer as negotiations progressed.
The dispute escalated in September when the union launched its first strike since POSCO was founded in 1968. After two rounds of partial strikes, the union threatened a third walkout, prompting the two sides to intensify last-minute negotiations.
Late last month, the two sides reached a tentative agreement that included a 2.6 percent increase in base pay, a one-time payment of 6 million won ($4,340) and expanded holiday bonuses, among other benefits.
The deal also included plans to raise holiday bonuses to 30 percent of base pay from 2028, as well as additional shift-holiday allowances and the introduction or expansion of certain job-related allowances.
The rejection raises the possibility of further labor action, adding uncertainty to POSCO's operations and potentially affecting its customers and suppliers across the steel industry. The dispute has also raised concerns about its potential implications for the local economies of Pohang and Gwangyang, where the company operates major facilities.
However, the relatively narrow 311-vote margin suggests the two sides could still find common ground in renewed negotiations.
"Our company will continue our good-faith dialogue, carefully considering both business conditions and employees' concerns as we work toward an amicable agreement based on labor-management cooperation,” a company official said.