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[Alpha Biz=(Chicago) Reporter Paul Lee] Hyundai Steel's wage and collective agreement, which had been running parallel due to the labor union's demand for special incentives, is expected to pass the second consecutive year following last year.
According to related industries on the 28th, Hyundai Steel Branch and Pohang Branch of the Chungnam Branch of the Korean Metal Workers' Union temporarily suspended this year's wage and collective agreement, citing the end of their leadership term. The union said in a statement, "We decided to temporarily suspend wage negotiations and enter the 13th executive election system based on the opinions of delegates considering the current 12th executive term." In the case of Chungnam branch, the executive election will be held from the 12th to the 14th of next month. Discussions on new wage negotiations of Hyundai Steel are expected to begin in earnest next year, with CEO Seo Kang-hyun appointed as the new president of Hyundai Steel on the 17th.
While steel industries such as POSCO and Dongkuk Steel have agreed to reach a wage and collective agreement to cope with the severe business downturn, Hyundai Steel's labor and management have failed to narrow their positions over special performance pay and has to take "union risks" until next year.
Currently, Hyundai Steel's labor union has demanded a special performance salary for the 70th anniversary, an increase of 184,900 won in basic salary, and an increase in various allowances, and has rejected additional proposals from the company (increase of 102,000 won in basic salary, 400% in performance-based bonuses and 13 million won in incentives). The labor union is asking for 25% (about 36 million won per person) of last year's operating profit (1.6164 trillion won) as a bonus. An industry official said, "The general assessment is that Hyundai Steel's poor performance this year is a very unreasonable demand."
Financial information provider FnGuide estimated Hyundai Steel's annual operating profit at KRW 1.2913 trillion this year, down 20.12% from KRW 1.6164 trillion a year earlier. This is a 27.55% decrease from an estimate of 1.7823 trillion won a year ago.
Next year's operating profit estimate (1.3264 trillion won) was also lowered by 30.04% from a year ago (1.8959 trillion won). The government's increase in electricity bills is also considered a negative factor for the labor collective agreement and Hyundai Steel.
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
