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Posco shares surge after union’s departure from hard-line labor group

Dec. 1, 2022 - 18:12 By Lee Yoon-seo

Shares of Posco companies fluctuated Thursday after one of its two unions decided to leave the Korean Metal Workers’ Union, considered one of the most hard-line labor groups here, via ballot a day earlier.

In a ballot held for three days, almost 70 percent of the Posco unionists voted in favor of the departure. The KMWU falls under the Korean Confederation of Trade Unions, the nation’s largest and most powerful labor group.

Following the news, Posco Steeleon, a steel plate producer, saw a 12.25 percent jump in its share price to close at 44,900 won ($34.50) -- a sizeable surge considering the share price had been hovering at about 30,000 won until early this week.

“I wouldn’t say the share price surged on the union’s decision,” a Posco official said on condition of anonymity, adding that Posco Steeleon actually has no union of its own.

“But investors’ positive sentiment overall seems to have affected the share price positively.”

Stocks of other affiliates such as Posco M-tech, maker of supplementary materials for steel, also saw 10.78 percent growth overnight, but the official said the rising lithium price drove up the share price, not the union issue.

Earlier, Posco unions decided to vote on a withdrawal from the militant labor union, citing the group’s insufficient efforts to improve the rights of employees while collecting too much in membership fees.

The unionists further claimed that KMWU did not provide any kind of support to Posco in September, when Typhoon Hinnamnor hit Posco’s steel mill in Pohang, North Gyeongsang Province, and caused a series of power outages at key facilities inside the plant.

"The KMWU wants the Posco union to work for the KMWU and exist for the KMWU," the Posco union said in a statement.

"Even though the union is voting legally (for the withdrawal from the KMWU), the KMWU is punishing union executives selected by the Posco employees," it added.

Earlier, the Posco union held its first voting session to withdraw from the KMWU on Nov. 3 and 4.

However, results of the vote, which showed a 66.9 percent approval rate for withdrawal, were rejected after KMWU raised objections on the grounds that their voting notice period was too short.

After the first voting session, in an attempt to prevent the Posco union from tearing away from KMWU, it expelled a number of executives from the Posco union.

In response to the Posco union's recent decision to withdraw, Land Minister Won Hee-ryong touted the union's decision to leave the umbrella union on Thursday, writing on Facebook, "The surge in stock prices immediately after the union's withdrawal from the KMWU reflects how individual investors see KMWU."

Won's comment follows a series of strong responses against a general strike held by cargo unions from the KCTU.

"The true purpose of actions taken by the workers who protect the production sites is to refuse to play the role of vanguard of KCTU, a nuisance," Won added.

"I congratulate and welcome the Posco union cutting ties with the Korean Confederation of Trade Unions!" he said in the post.