Second strike at POSCO another nonevent

On the eve of the strike over wages and conditions called by POSCO's labour union, union leaders had warned that it would cause inevitable disruptions as about twice as many workers would be participating compared with the first strike.

That strike, for 48 hours from September 9 and the first in the steelmaker's 58-year history, had drawn workers from the No. 2 electrical steel plant at the Pohang works and from the pickling lines at the Gwangyang works, as Mysteel Global reported.

The present strike, to last 120 hours, involves union members from the No. 2 hot-strip mill at Pohang and the No. 4 HSM at its Gwangyang. However, Korean media reports say only about 120 workers of the union's approximately 10,000 members are participating, the same number as during the first strike.

"There will be no major disruption to plant operations," Korea's Yonhap News quoted POSCO as saying, with company management having lifted production in advance and prepared replacement staffing to minimize disruptions.

In the latest negotiations that had broken down on September 15, the union had reportedly stuck to its demands for 7.1% increase in base pay, a performance bonus equivalent to 600% of monthly wages, 50 POSCO shares for each member, and a holiday bonus equivalent to 200% of monthly wages, as reported.

Management had stuck to its offer of a 2% increase in base pay, a KRW 3.5 million ($2,600) performance bonus and KRW 500,000 in Iocal gift cards. The company proposed continuing negotiations through Friday to reach a revised agreement on key issues, but the union decided to proceed with the planned walkout.

Management had argued that under prevailing business conditions, the union's demands couldn't be met. POSCO's operating profit in the first half of this year plunged 43.3% from a year earlier amid the prolonged steel-market downturn driven by oversupply from China and sluggish domestic demand. Since June, company executives have been forgoing 10-20% of their salaries.

Although the union is threatening more widespread industrial action in support of its claims, local business daily Maeil Pulse suggests union politics might be in play as well. It notes that the strike coincides with a union election for chairman scheduled for October 2 where incumbent, Kim Sung-ho, is seeking another term. "Some industry observers have linked the union's hardline stance to the election, while the union says the two are unrelated," the Maeil said.

Controversy has also arisen over the decision of the union's dispute committee to pay participating workers (excluding union officials) their full lost wages plus a KRW 300,000 strike compensation fund allowance. The fund comes from union dues set aside annually, and striking workers only need to check in at the union office each day before returning home.

"The union said the payment was intended to ease the psychological burden on workers joining a strike for the first time after decades without labour disputes (but) some industry observers have criticized the measure as an incentive to join the strike," the Maeil observed.

The union leadership election period spans September 22 to October 2 and as union rules prohibit strikes during elections, POSCO management is planning to use the period of peace to seek a wage deal, it added.

Written by Russ McCulloch, russ.mcculloch@mysteel.com 

Edited by Alyssa Ren, rentingting@mysteel.com