POSCO Faces Major Labor Crisis as First Strike Looms in 58 Years

by Lee nakyeong Posted : May 11, 2026, 17:24Updated : May 11, 2026, 17:24
POSCO flag displayed at the POSCO Center in Gangnam, Seoul
POSCO flag displayed at the POSCO Center in Gangnam, Seoul [Photo=POSCO]
POSCO is facing its first strike threat in 58 years as tensions over the direct hiring of subcontractor employees escalate to the primary contractor level. This situation tests the crisis management skills of Jang In-hwa, chairman of the POSCO Group, in his final year of tenure.

According to industry sources on May 11, some employees from subcontractors at POSCO's Pohang and Gwangyang steelworks have refused to report to work, disrupting operations. The affected employees include those from POTL and PSC, who are being considered for direct hiring. POSCO has reportedly deployed direct employees to replace them on an emergency basis.

Dissatisfaction among subcontractor unions regarding issues such as recognition of service, wage restructuring, and performance bonuses has led to unrest on the ground.

Last month, POSCO announced plans to directly hire 7,000 subcontractor employees through a cooperative council at its Pohang and Gwangyang steelworks, detailing the hiring process, conditions, and treatment. A new job category, 'Operational Synergy (S) Group,' was established, with a promotion system ranging from S1 to S7. Concerns have been raised about potential wage reductions and devaluation of experience.

The primary contractor's union has also expressed strong dissatisfaction. The POSCO labor union, affiliated with the Korean Confederation of Trade Unions, filed for mediation with the Central Labor Relations Commission and is preparing for a general strike. This follows a meeting on May 6, where management and labor failed to reach an agreement on direct hiring issues. The union has demanded an apology and compensation from management, which has reportedly not been accepted, escalating the conflict.

However, the union has indicated a preference for dialogue over an immediate full-scale strike. A union representative stated, "POSCO's competitiveness lies in its labor-management relations, so we will strive to resolve this through dialogue. If the company presents a proactive solution during the mediation period and we can narrow the gaps, we can continue discussions; otherwise, we will proceed with a phased strike plan."

POSCO is committed to negotiating to avoid the worst-case scenario of a strike. A company representative said, "We are coordinating labor-management opinions regarding the direct hiring joint committee and plan to maintain ongoing communication with the union."

Since its founding in 1968, POSCO has maintained a reputation as a non-conflict workplace, having never experienced a full-scale strike. Industry observers note that if this conflict escalates into a general strike, it could pose significant challenges for Chairman Jang's leadership.

Particularly, Jang has emphasized 'field-centered management' and 'organizational stabilization' since taking office, leading to speculation that the resolution of this labor dispute could impact his chances for reappointment.

An industry insider remarked, "In the steel industry, the continuous process nature means that disruptions in even a single area can significantly affect productivity and profitability. As the direct hiring issue extends beyond personnel conflicts to concerns about labor disputes and production disruptions, it could place considerable pressure on Chairman Jang."



* This article has been translated by AI.