Hyundai Steel's hard-line union must consider job security
Published: 26 Feb. 2025, 00:00
For the first time since its founding in 1953, Hyundai Steel has initiated a partial lockout. Amid ongoing conflicts with its labor union over wage and collective bargaining agreements, the company indefinitely shut down a key process at its cold rolling mill in Dangjin, South Chungcheong. As a result, the production of high-value-added cold-rolled steel sheets used in automobiles and home appliances has been suspended. This is the first large-scale lockout in Korea since Mando, an auto parts manufacturer, implemented one in 2012.
Just as unions have the right to strike, employers also have the right to lockouts under the Labor Union Act. During a lockout, employees do not receive wages and are barred from entering the workplace. Hyundai Steel and its union have engaged in 22 rounds of negotiations since last September, but failed to narrow their differences over performance-based bonuses. The union, affiliated with the Korean Confederation of Trade Unions’ Metal Workers’ Union, has demanded the highest-ever bonus payout and has staged both full-scale and partial strikes since last month. As of this month, strike-related losses have reportedly reached 25.4 billion won ($19 million).
The steel industry is under immense pressure from both domestic and international challenges. Korean steelmakers must compete with low-cost Chinese imports while also facing the looming threat of a 25 percent tariff from the second Trump administration. Due to the steel industry downturn, Hyundai Steel’s consolidated operating profit last year shrank by 60 percent year-on-year to 314.4 billion won. If additional performance bonuses are factored in, nearly half of last year’s operating profit would be wiped out. To overcome tariff barriers, Hyundai Steel is considering building a steel plant in the United States, an investment that could reach 10 trillion won. The more the company expands overseas, the fewer jobs will remain in Korea.
Nevertheless, Hyundai Steel’s union rejected the company’s offer of a 26.5 million won bonus per employee, insisting on a payout equivalent to those received by Hyundai Motor and Kia, which earned record-breaking profits last year. The union is recklessly making demands without considering the precarious state of its own jobs. In contrast, the United Auto Workers (UAW), the largest automobile industry union in the United States, has openly welcomed Trump’s proposed tariffs. Rather than issuing a single statement opposing tariffs that could threaten their own employment, Korea’s steel unions are engaged in a self-destructive struggle, further weakening the government’s bargaining position.
Hyundai Steel CEO Seo Kang-hyun issued a statement Tuesday, saying, "This is not a time to deepen conflicts. The union and management must come together to overcome dire challenges," urging the withdrawal of the strike.
Meanwhile, the Bank of Korea’s Monetary Policy Board cut the benchmark interest rate by 0.25 percentage points as expected Tuesday, also lowering the country’s GDP growth forecast for this year from 1.9 percent to 1.5 percent. While macroeconomic policies aim to boost the economy, they alone are insufficient. For a true economic recovery, union behavior must change as well. If entrenched unions continue opposing the semiconductor industry’s exemption from the 52-hour workweek, ignoring the need to reform the labor market’s dual structure, and resisting measures to create jobs for young people, there is little hope for Korea’s economy.
Translated using generative AI and edited by Korea JoongAng Daily staff.
Just as unions have the right to strike, employers also have the right to lockouts under the Labor Union Act. During a lockout, employees do not receive wages and are barred from entering the workplace. Hyundai Steel and its union have engaged in 22 rounds of negotiations since last September, but failed to narrow their differences over performance-based bonuses. The union, affiliated with the Korean Confederation of Trade Unions’ Metal Workers’ Union, has demanded the highest-ever bonus payout and has staged both full-scale and partial strikes since last month. As of this month, strike-related losses have reportedly reached 25.4 billion won ($19 million).
The steel industry is under immense pressure from both domestic and international challenges. Korean steelmakers must compete with low-cost Chinese imports while also facing the looming threat of a 25 percent tariff from the second Trump administration. Due to the steel industry downturn, Hyundai Steel’s consolidated operating profit last year shrank by 60 percent year-on-year to 314.4 billion won. If additional performance bonuses are factored in, nearly half of last year’s operating profit would be wiped out. To overcome tariff barriers, Hyundai Steel is considering building a steel plant in the United States, an investment that could reach 10 trillion won. The more the company expands overseas, the fewer jobs will remain in Korea.
Nevertheless, Hyundai Steel’s union rejected the company’s offer of a 26.5 million won bonus per employee, insisting on a payout equivalent to those received by Hyundai Motor and Kia, which earned record-breaking profits last year. The union is recklessly making demands without considering the precarious state of its own jobs. In contrast, the United Auto Workers (UAW), the largest automobile industry union in the United States, has openly welcomed Trump’s proposed tariffs. Rather than issuing a single statement opposing tariffs that could threaten their own employment, Korea’s steel unions are engaged in a self-destructive struggle, further weakening the government’s bargaining position.
Hyundai Steel CEO Seo Kang-hyun issued a statement Tuesday, saying, "This is not a time to deepen conflicts. The union and management must come together to overcome dire challenges," urging the withdrawal of the strike.
Meanwhile, the Bank of Korea’s Monetary Policy Board cut the benchmark interest rate by 0.25 percentage points as expected Tuesday, also lowering the country’s GDP growth forecast for this year from 1.9 percent to 1.5 percent. While macroeconomic policies aim to boost the economy, they alone are insufficient. For a true economic recovery, union behavior must change as well. If entrenched unions continue opposing the semiconductor industry’s exemption from the 52-hour workweek, ignoring the need to reform the labor market’s dual structure, and resisting measures to create jobs for young people, there is little hope for Korea’s economy.
Translated using generative AI and edited by Korea JoongAng Daily staff.
with the Korea JoongAng Daily
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