Labor Strike Disrupts Hyundai Steel’s Operations
On February 11, Hyundai Steel, one of South Korea’s major steel producers, was forced to suspend operations at its key plants due to a large-scale labor strike. The strike, organized by the company’s labor union, led to the temporary halting of production from 7 a.m. on February 11 to 7 a.m. on February 12. This disruption affected several of Hyundai Steel's critical production sites, including those in Dangjin, Incheon, Pohang, and Suncheon.
Financial Struggles and Market Pressures Intensify
Hyundai Steel has faced a difficult financial year, with a 60.6% drop in operating profit, which fell to KRW 314.4 billion ($216 million) in 2024. This is the lowest level the company has reported since 2002, excluding the year 2020, which was impacted by the pandemic. The downturn has been largely attributed to a slow-down in the construction sector, a key market for steel, and heightened competition from cheaper steel imports, particularly from China.
In addition to these economic challenges, Hyundai Steel is facing increased pressure from government policies, including the looming 25% tariff on steel imports in the U.S. While these external factors continue to affect the company’s performance, internal disputes are adding to the complexity of its situation.
The Union’s Demands for Fair Compensation
Despite the company's financial difficulties, the labor union has been firm in its demand for higher wages and improved benefits. This includes a base salary increase of KRW 159,800, higher performance-based bonuses, and expanded vehicle purchase benefits for employees. The union justifies these demands by pointing to the strong earnings of Hyundai Motor Group, the parent company of Hyundai Steel, which has been performing well despite Hyundai Steel’s struggles.
In a public demonstration outside Hyundai Motor Group’s headquarters in Seoul, union members from Hyundai Steel's plants nationwide protested, demanding compensation in line with what Hyundai Motor’s workers receive. This call for parity highlights the growing frustration among Hyundai Steel's workforce, who believe that despite the company's financial hardships, they deserve a fair share of the profits that the parent company is generating.
A Prolonged Labor Dispute with No Resolution in Sight
The ongoing labor dispute between Hyundai Steel and its union has now persisted for over five months, with negotiations having stalled since September 2024. Earlier attempts at resolving the conflict through partial strikes have failed, and the situation has escalated as the union has ramped up its actions. As of now, no resolution appears imminent, and the strike has further complicated the company’s already precarious position.
Challenges for South Korea’s Steel Industry
Hyundai Steel’s situation is reflective of broader challenges within South Korea’s steel industry. The market faces significant headwinds, including price pressures from Chinese steel exports and the potential 25% tariff on steel imports to the U.S. These external challenges, coupled with Hyundai Steel's internal labor disputes, create an uncertain outlook for the company’s future. Navigating these obstacles will require both financial recovery and labor peace if Hyundai Steel is to maintain its competitive position in the global steel market.
