Posco wage talks collapse, putting 58-year no-strike record at risk

Posco's management and union have failed to reach an agreement in this year's wage negotiations, putting the steelmaker's 58-year no-strike record — maintained since its founding — at risk of being broken.

The Posco union declared a breakdown in the 2026 collective bargaining talks after the sixth round of negotiations Thursday, and said it would proceed with mediation through the National Labor Relations Commission. If the commission rules that mediation has failed, the union will be entitled to call a legal strike, backed by a strike authorization vote it already passed.

The two sides opened this year's wage talks with a preliminary meeting on June 16, followed by a second round on June 23 and a third on June 30, but they were unable to narrow differences over the pace of negotiations and the level of proposals put forward.

The union held a strike authorization vote among its members July 8 and 9. Of 9,178 eligible voters, 8,911 cast ballots — a turnout of 97.09 percent. Of those, 8,213 voted in favor, an approval rate of 92.17 percent.

The main sticking points are the size of the pay raise, performance bonuses and welfare benefits. The union is demanding a 7.1 percent increase in base pay, a 600 percent incentive bonus, 50 shares of employee stock, application of five years' worth of seniority increments, and a 200 percent holiday bonus. Management estimates that meeting the union's demands would require roughly 1.4 trillion won ($945 million) — about twice the cost of last year's union demands.

Management, for its part, has offered a 1.2 percent base pay increase and a 2 million won performance bonus, contingent on hitting this year's operating profit target. The company also proposed expanding individual performance awards, broadening special promotions, improving conditions for on-site resident workers, revising housing loan criteria and raising holiday bonuses.

On conditions for resident workers, the company proposed raising a site-assignment incentive allowance to 150,000 won. The holiday bonus proposal included 1 million won each for Lunar New Year and chuseok, plus a 100,000-won fuel gift voucher.

Underlying the dispute is also the question of directly hiring contract workers at Posco's production sites. The company announced a road map in April for bringing subcontracted on-site workers onto its direct payroll. The union subsequently raised objections over a lack of consensus and the potential erosion of existing employees' welfare benefits, calling for the formation of a joint labor-management consultative body.

Labor and management formed a joint consultative body on direct employment on April 15, but failed to close the gap over compensation arrangements. The union filed for mediation with the National Labor Relations Commission in May, but the commission issued an administrative guidance ruling, leaving the union without the right to strike at that time.

The union subsequently launched a dispute response committee and steadily escalated pressure at the bargaining table. More recently, it has been raising the temperature for collective action, including issuing guidance to members to wear union vests on the job.

Posco has maintained that it cannot accept the union's demands as presented, given the operating environment facing the steel industry. The company cited a combination of pressures — low-cost competition from China, the spread of global protectionism, and the burden of high energy prices, a weak won and elevated interest rates — and said it must weigh employment stability alongside a sustainable labor-management relationship.

Posco has maintained an unbroken no-strike record since its founding in 1968. Last year, the company and union reached a final agreement on wages and collective bargaining terms, extending that record to 57 years. This year, however, the combination of the direct-employment issue and wage demands has driven labor-management tensions higher and faster than in previous years.

Industry observers say a strike, if it materializes, would have significant ripple effects. Posco's products feed into the supply chains of major manufacturing sectors — including automobiles, shipbuilding and home appliances — and attention is focused on whether the negotiations will drag on.

Posco said it would "do its utmost to reach a reasonable and amicable agreement through continued communication with the union so that it can understand the business environment the steel industry currently faces," adding that it would "take thorough precautions to prevent any impact on major domestic and international industries, including automobiles, shipbuilding and home appliances, from a labor-management dispute."