Posco narrowly avoids strike as union accepts wage deal

Posco Center in Gangnam-gu, Seoul (Yonhap)

Posco has avoided the first-ever strike in its 55-year history as its management and union reached an agreement following six months of wage talks.

The wage negotiation was concluded as the union voted to accept a tentative agreement made by the two sides on Thursday night.

Of 11,245 union members, 10,856 joined the vote, according to Posco. The number of union members who voted in favor of the agreement reached 5,527, accounting for 50.91 percent, while the number of union members who were against the deal came to 5,329 with 49.09 percent.

Under the deal, Posco will raise its basic wage level by 100,000 won ($76) and provide 4-million-won worth of stocks, and 3 million won in other forms of payment. The company will also allow a 4-day workweek every other week to its employees.

“The negotiations took longer than usual, but the company was able to come to an agreement because the management and union were committed to continue their talks,” an official from the company said.

Posco added that the company decided to offer a bigger wage increase than that of last year, despite ongoing difficulties in its management amid the limping global economy and increasing competition in the global steel market.

Some, however, argued that Posco may face a similar challenge in the next year’s wage negotiations. “Given that Posco had difficulties in securing a 50-percent threshold in the recent vote, the company may face difficulties in its wage talks with the union again next year,” an industry source said.

This year's wage talks started in May but continued through November as negotiations continued to fall through.

By Shim Woo-hyun(ws@heraldcorp.com)