Hyundai Steel Implements First-Ever Partial Lockout Amid Prolonged Union Strike

 

 

 

Hyundai Steel has decided to implement a partial lockout at some production lines of its cold rolling plant in the Dangjin Steelworks on the 24th in response to the labor union’s strike. This marks the first partial lockout in the company's history.

In a public notice issued under the name of the CEO, the company stated, "Due to the labor union strike that has continued since February 1, normal production has become difficult, causing serious disruptions to business operations." It further announced, "As a result, we are implementing a lockout of the pickling and tandem cold mill (PL/TCM) lines at Cold Rolling Plants 1 and 2 in Dangjin Steelworks."

This measure is based on the Trade Union and Labor Relations Adjustment Act, which allows an employer to conduct a lockout after the commencement of a labor dispute. During the lockout period, the employer is not obligated to pay wages to the affected workers.

Hyundai Steel and its labor union have been negotiating wages and collective agreements since September last year, but they have failed to bridge their differences, leading to a deadlock.

In response, the labor union staged a partial strike at the Dangjin cold rolling plant on January 21 and expanded its strike nationwide on February 11. The union has been repeatedly staging partial and temporary strikes at the PL/TCM lines, which are critical to the production of cold-rolled steel sheets, effectively disrupting production.

The PL/TCM lines are essential processes that remove impurities from hot-rolled steel sheets and perform rolling for cold-rolled steel sheet production. The suspension of these facilities inevitably causes disruptions in the overall production schedule.

Hyundai Steel stated, "The strike is threatening operational stability and accumulating economic losses," adding, "To minimize production disruptions and ensure workplace safety, we have made the unavoidable decision to implement the lockout."

The company estimated that labor disputes from February 1 to 22 resulted in a production loss of approximately 270,000 tons of cold-rolled steel sheets, with financial damages expected to reach around 25.4 billion KRW.

Meanwhile, Hyundai Steel’s wage and collective agreement negotiations have been facing difficulties primarily due to disagreements over performance bonuses.

The company has proposed a base salary increase of 100,000 KRW, along with performance bonuses amounting to 450% of the base salary plus an additional 10 million KRW. However, the labor union is demanding an increase to 500% of the base salary and 18 million KRW in bonuses, aligning with Hyundai Motor Company’s compensation level.

Although Hyundai Steel recorded a net profit of 47.3 billion KRW last year on a standalone basis, the company maintains that accepting the union’s demands would result in a 65 billion KRW deficit, making further concessions difficult.

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Hyundai Steel Implements First-Ever Partial Lockout Amid Prolonged Union Strike