Hyundai Steel has entered an emergency management system, cutting the salaries of all executives by 20% and considering voluntary retirement for all employees.
The decision was made in response to several challenges, including low-cost steel imports from China, sluggish domestic demand, the sudden implementation of a 25% steel tariff by the second Trump administration starting on the 12th, and ongoing labor strikes.
On the 14th, Hyundai Steel announced the initiation of the emergency management system, stating, “As of the 13th, we have reduced the salaries of all executives by 20% and are considering voluntary retirement for all employees,” and “This measure is due to the belief that it is difficult to improve management without strong self-rescue measures in the face of recent significant domestic and international crises.”
Hyundai Steel also plans to minimize overseas business trips as part of “extreme cost reduction” efforts.
This situation is closely tied to the crisis in the steel industry. As domestic construction demand has shrunk due to worsening economic conditions, Hyundai Steel has recently reduced operations at its Pohang Plant 2 and is accepting applications for voluntary retirement from technical staff at the Pohang Plant and for redeployment to the Dangjin Steel Plant and Incheon Plant until today.
Amidst the encroachment of low-cost Chinese and Japanese steel products on the domestic market share, Hyundai Steel is responding to unfair trade by pursuing anti-dumping lawsuits against products like heavy plates and hot-rolled products.
The crisis for Hyundai Steel has deepened with the increasing trade barriers following the inauguration of the second Trump administration. U.S. President Donald Trump decided to impose a 25% tariff on South Korean steel products as of the 12th (local time).
Hyundai Steel has also faced difficulties in wage negotiations with the union since September of last year. As negotiations stalled over issues such as performance bonuses, the union has continued with general and partial strikes.
Despite management implementing partial lockouts of certain lines at the Dangjin Steel Plant’s cold rolling mill, negotiations remained stagnant.
The union plans another partial strike at the Dangjin Steel Plant from 7 p.m. the previous day until the 20th.
Hyundai Steel management proposed a performance bonus plan averaging 26.5 million won per person (450% of basic salary plus 10 million won), but the union reportedly demands a performance bonus at the level of Hyundai Motor Group, which is 500% of basic salary plus 18 million won.
Hyundai Steel stated, “Labor and management resumed negotiations on the 13th but failed to reach a consensus and the negotiations collapsed,” and expressed concern that “the ongoing labor-management conflict is expected to have an inevitable negative impact on the domestic industry.”
(Photo: Yonhap News)