POSCO Resumes Galvanized Steel Orders as a 'Desperate Measure'

Increasing Operating Rates of Idle Factories
Minimizing Worker Leave and Wage Reductions
Starting Orders for Low Value-Added Products

[Asia Economy Reporter Park So-yeon] POSCO has resumed orders for galvanized steel sheets as part of efforts to increase factory operating rates. Galvanized steel sheets are thin iron plates coated with zinc on the surface and are considered a representative low-cost product. POSCO has so far focused on producing high-end steel products at domestic factories, while some galvanized steel sheets were produced at local subsidiaries in Southeast Asia.

According to related industries on the 14th, POSCO recently started taking orders for low value-added products to prevent worker layoffs and wage reductions caused by an increase in factory shutdowns due to the impact of the novel coronavirus disease (COVID-19).

POSCO has mainly produced high-end steel products for machinery, construction, and automotive structural use at domestic factories. However, due to the order cliff caused by COVID-19, the number of shutdown factories increased, leading to worker layoffs becoming an issue. As a desperate measure, POSCO is believed to have started taking orders for low-cost products such as galvanized steel sheets, which had been discontinued for domestic production. This year, POSCO began production cuts for the first time in 12 years since 2008 due to decreased demand in front industries such as automotive, construction, and shipbuilding caused by the economic downturn from COVID-19.

Kim In-cheol, chairman of the POSCO labor union, said, "Many factories are currently shut down, so it is important to maintain factory operating rates and minimize employee layoffs." He added, "Recently, seeing the management trying to increase factory operating rates by even accepting orders for galvanized steel sheets used for slate roofs in difficult times in the past, a consensus is forming among union members that we should not only make demands."

Accordingly, the POSCO labor union recently decided at a delegates' meeting to entrust the 2020 wage negotiations to the company to overcome the management crisis early. The final decision will be made through a member approval vote. Chairman Kim emphasized, "POSCO Group is a family with 50 affiliates and 100 partner companies," adding, "We will work together to overcome the COVID-19 crisis."