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THE INVESTOR
February 05, 2023

Market Now

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

  • PUBLISHED :December 04, 2022 - 09:40
  • UPDATED :December 04, 2022 - 09:49
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(Posco)

One of two unions at Posco cemented its decision to leave the Korean Metal Workers' Union after its ballot indicated as of Wednesday that nearly 70 percent of its members had voted in favor of its withdrawal from the nation's most hard-line labor group.

The South Korean steelmaker Posco's result of ballot held from Monday to Wednesday showed that 69.9 percent of the Posco unionists had agreed on leaving KMWU, a metal worker's union under the Korean Confederation of Trade Unions.

With the results, Posco's union sealed its agenda to withdraw from the militant umbrella union KCTU, after it met the criteria of having two thirds of its unionists approve of the decision, with more than 50 percent voters in attendance.

The decision for a withdrawal follows the Posco unionists' slew of claims that KMWU had not been working to improve the rights of Posco's employees, but only focusing on collecting union fees.

The unionists further claimed that KMWU did not provide any kind of support to Posco in September, when the Typhoon Hinnamnor hit Posco’s steel mill in the southeastern city of Pohang and had caused 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 released.

"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, Posco union had held its first voting session to withdraw from the KMWU from Nov. 3 to Nov. 4.

However, the result of the votes, which showed 66.9 percent approval rate for the withdrawal, was rejected after KMWU had raised objections under the grounds that their voting notice period was short.

After the first voting session, in attempts to prevent the Posco union from tearing away from KMWU, the KMWU had since expelled a number of executives from the Posco union.

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

The comment follows Minister Won's series of strong responses against the 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 Posco union cutting ties with Korean Confederation of Trade Unions!" he said in the post.

Upon the news of Posco union's withdrawal from KCTU, stocks from Posco's steel plate production affiliates hit high marks on Wednesday, closing at 40,000 won ($30) per share, up about 29.9 percent from Tuesday.

Other affiliates including tech giant Posco ICT and the holdings company Posco Holdings' stocks saw 9.9 percent and 2 percent growth compared Tuesday, as well.

By Lee Yoon-seo (yoonseo.3348@heraldcorp.com)



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