POSCO is facing unprecedented uncertainty as tensions escalate between the company and labor unions over its plan to directly employ workers from partner companies. The union has initiated dispute procedures, claiming the move was made unilaterally without prior consultation. There are even discussions about the possibility of the first total strike in the company's history.
In April, POSCO announced its decision to directly hire 7,000 workers from partner companies at its Pohang and Gwangyang steelworks, citing the establishment of a "coexistence labor model." The company also revealed specific hiring methods, conditions, and a new treatment system. A new job category called "Operational Synergy (S)" was created, with a promotion system ranging from S1 to S7.
This direct employment initiative is not unprecedented in the steel industry. In 2021, Hyundai Steel became the first private company in South Korea to hire over 4,500 employees from its partner companies as regular staff, followed by Dongkuk Steel, which directly employed 889 subcontracted workers in 2024.
However, POSCO's case is notable for its scale and potential impact. The direct hiring plan affects about 40% of POSCO's workforce of approximately 17,000 employees, including those at the steelworks, which could influence the existing regular employment structure and overall organizational operations.
The main issue is the lack of sufficient dialogue with the workforce during the implementation of such a significant change. The union has strongly criticized the absence of consultation, emphasizing that their concerns are not about direct employment itself but rather the process leading up to it. Existing employees have also expressed worries about potential changes to job structures, personnel management, and wage systems.
Kim Sung-ho, chairman of the POSCO union, stated in a press release at the time of the announcement, "The management ignored the minimum procedure of building consensus among employees, causing deep wounds among union members. The efforts and unique values of each employee should not be undermined during the hiring process."
Workers from partner companies slated for direct employment have also voiced their dissatisfaction, particularly regarding the perceived discrimination of being placed in a separate S job category, distinct from the existing regular production E category. Some employees from certain partner companies at the Pohang and Gwangyang steelworks have already refused to work due to grievances over the wage system, disrupting operations. These include workers from companies like POTL and PSC, who are reportedly being replaced by direct hires to maintain operations.
Currently, the wage system for the S category is set at over 70% of that of the E category for employees with the same years of service, and it is expected to offer the same benefits as direct employees.
The company's concerns are understandable, as there is increasing demand in the industry for enhanced accountability from primary contractors and improvements in safety systems. The ongoing issue of "outsourcing risks" in manufacturing has become an urgent challenge. In this context, POSCO appears to have made a significant decision to pursue large-scale direct employment. However, having the right direction does not guarantee that the process will be fully accepted.
In industries like steel, where organizational culture is strong and job structures have been maintained for a long time, the process of persuading members is crucial. There are concerns that if this conflict continues, it could affect not only labor relations but also the stability of production sites.
POSCO has consistently emphasized "coexistence" as a core corporate value. The company must consider the joint growth with partner companies and the enhancement of safety as essential tasks. However, true coexistence cannot be achieved through mere declarations. Equally important is how well the members can understand and accept these policies. What POSCO needs now is not rapid decision-making but sufficient communication to restore trust within the workforce.
* This article has been translated by AI.
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