Hyundai Steel implements emergency management measures

Hyundai Steel has implemented emergency management measures. Amid sluggish domestic demand and continued pressure from low-cost Chinese imports, the company is taking self-rescue measures as U.S. President Donald Trump's administration has officially imposed steel tariffs. Production disruptions due to a labor union strike have further exacerbated the difficulties.

On Friday, Hyundai Steel announced cost-cutting measures, including a 20% salary reduction for all executives and the simplification of overseas business trips. The company is also considering accepting voluntary retirement applications from all employees.

Hyundai Steel described these measures as “drastic actions for survival.” With multiple internal and external challenges, the company recently scaled down operations at its Pohang Plant No. 2. It has also been accepting voluntary retirement applications from technical staff at the Pohang plant and transfer applications for reassignment to the Dangjin and Incheon plants.

The downturn in the domestic construction industry has reduced demand for heavy plate steel, further deteriorating market conditions. Additionally, an influx of foreign steel products has eroded Hyundai Steel’s market share, heightening concerns. In response, the government has decided to impose anti-dumping duties on Chinese heavy plate steel and has investigated Chinese and Japanese hot-rolled steel products. Furthermore, concerns over export competitiveness intensified as President Trump imposed a 25% tariff on steel products from Korea and other countries on Wednesday.

Since September, Hyundai Steel has been facing difficulties in wage negotiations with the labor union. The company proposed a performance bonus of approximately 26.5 million won per employee on average, but the union rejected the offer and continued the strike. The union is demanding additional performance bonuses at the level of Hyundai Motor Group, but the company argues that its financial situation makes it difficult to increase the bonuses, as it recorded a net loss of 65 billion won last year.


한종호 hjh@donga.com