POSCO headquarters in Gangnam-gu, Seoul. / Chosunilbo

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POSCO, South Korea’s leading steelmaker, is on the brink of its first-ever strike since its founding in 1968. The company’s labor union voted in favor of a strike on Nov. 25, with a 72.3% approval rate. This decision follows a breakdown in wage negotiations between labor and management earlier this year and the failure of two mediation attempts by the National Labor Relations Commission.

The company has been undergoing significant restructuring amid a global steel market slowdown and heightened competition from low-cost Chinese producers. POSCO has recently put its only steel mill in China up for sale and closed two domestic plants. A series of fires that broke out in POSCO’s steel mill in Pohang on Nov. 10 and again on Nov. 24 have been adding to the steelmaker’s woes.

POSCO’s labor union conducted a vote on whether to take industrial action from 6 a.m. to 5 p.m. on Nov. 25 and secured the “right to strike” with a 72.3% approval rate, according to the company. “While the union has obtained the right to strike, we plan to continue negotiations with the union to reach a peaceful resolution,” said a company official.

Industry observers expect the union to use this newfound leverage in further negotiations rather than immediately taking action. Last year, the union similarly voted in favor of striking, with 77.8% approval, but concluded wage negotiations within 11 days without a walkout.

The steelmaker’s flagship Pohang Works, POSCO’s steel mills in Pohang, has experienced two fires in recent weeks, raising concerns within the company and the local community. A fire broke out at the facility’s No. 3 Finex furnace, which produces molten iron, around 11:15 p.m. on Nov. 24. The blaze, which was extinguished within two hours, caused no injuries. POSCO suspects the fire was caused by damage to the outer steel shell of a melting furnace, which is used to liquefy metal. The company has pledged to investigate the exact cause with the fire department and other relevant agencies.

The incident follows a similar fire at the same plant on Nov. 10, which injured one employee and halted steel production for more than ten days. Although the plant was restored and scheduled to resume operations by Nov. 19, the second fire disrupted these plans.

Despite these setbacks, POSCO reported that recent fires have not affected operations due to the accumulation of inventory amid the current steel market slump and the closure of other plants.

[Park Soon-chan]

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