Hyundai Steel’s labor union will stage a full-scale strike on Mar. 26, marking its second walkout this year following a breakdown in wage and collective bargaining talks in January. Negotiations between the company and the union have been ongoing since September but remain deadlocked over performance-based bonuses and other key issues.
The union is demanding top-tier compensation within Hyundai Motor Group and recently rejected the company’s offer of a bonus equal to 450 percent of base salary and a lump-sum payment of 10 million won (approximately $6,800). Some observers say the union’s demands reflect dissatisfaction with its 2022 agreement, which was perceived as lagging behind packages secured by other group affiliates, despite Hyundai Steel’s strong earnings in 2021.
The union plans to carry out a 24-hour strike and hold a rally on Mar. 26 at Hyundai Steel’s Dangjin plant in South Chungcheong Province. It claims the company failed to present an updated proposal during working-level negotiations, triggering the decision to strike.
Prolonged industrial action is expected to deepen losses at Hyundai Steel. A previous walkout in February led to a production loss of 270,000 tons in the cold-rolled steel division, resulting in an estimated 25.4 billion won (around $19 million) in damages. While operations remain disrupted, the company said it has managed to meet supply commitments through inventory.
In an unprecedented move, Hyundai Steel earlier halted operations at its pickling and tandem cold mill (PL/TCM) due to the strike—its first such shutdown. Operations resumed on Mar. 11 after a 16-day closure, and the union briefly suspended its partial strike. However, negotiations soon stalled again, prompting the union to resume strike activity, alternating between the PL/TCM and the continuous galvanizing line (CGL), a downstream facility.
Analysts point to the 2022 wage negotiations as a key source of the prolonged dispute. In 2021, Hyundai Steel posted a 28 percent year-on-year revenue increase to 19.99 trillion won ($13.6 billion) and a 5,421 percent surge in operating profit to 2.3 trillion won ($1.5 billion), with an operating margin of 12 percent. Based on those results, the company agreed to pay a bonus equal to 300 percent of base salary and a fixed payment of 13.3 million won in 2022.
By comparison, Hyundai Motor Company’s 2022 package included a 200 percent base salary bonus, a 5.5 million won fixed payment, an additional 100 percent of base pay as a special incentive, and 20 shares of company stock then valued at approximately 3.8 million won. The total exceeded Hyundai Steel’s offer by about 4 million won. Hyundai Motor also paid all employees an additional 4 million won in special incentives. This came despite Hyundai Motor’s 10 percent revenue growth to 55.6 trillion won ($37.9 billion) in 2021, as its operating profit declined 14 percent to 661.6 billion won ($452 million), with a 1.5 percent operating margin.
Following Hyundai Motor’s incentive payout, Hyundai Steel’s union demanded equal treatment. It staged a partial strike and occupied executive offices, including the president’s office at the Dangjin plant. Hyundai Transys’ union also called for similar bonuses.
In the 2023 wage deal, Hyundai Steel agreed to pay a fixed bonus of 30 million won. Hyundai Motor, meanwhile, offered a package including a bonus equivalent to 400 percent of base salary, a 10.5 million won fixed payment, and 15 shares of stock. The group uses operating profit margin as a key performance indicator, with Hyundai Steel posting a 6.2 percent margin in 2022 compared to Hyundai Motor’s 4.3 percent.
Since then, market conditions have deteriorated. Hyundai Steel’s revenue fell 9 percent in 2023 to 21.61 trillion won ($14.7 billion), and its operating profit plummeted 56 percent. Its operating margin dropped to 3.0 percent. In contrast, Hyundai Motor reported a 19.5 percent increase in revenue to 78.03 trillion won ($53.2 billion) and a 136 percent surge in operating profit to 6.67 trillion won, lifting its margin to 8.5 percent.
