More than 10,000 members of the Korean Metal Workers' Union affiliated with Hyundai Steel will hold a protest in front of the Hyundai Motor Group headquarters in Yangjae-dong, Seoul, on the afternoon of the 11th. This is to condemn the fact that last year's wage and collective bargaining agreement with management has not yet been concluded due to differences in positions. Hyundai Steel has recently seen a significant decline in operating profit due to poor market conditions, yet the union is demanding compensation on par with Hyundai Motor, which recorded its highest-ever performance.
Hyundai Steel proposed a 100,000 won increase in basic salary along with a performance bonus calculated as 500% of the basic salary plus 5 million won. However, the union decided to stage a protest in Seoul, demanding an increase of 159,800 won in basic salary, excluding longevity pay, the largest possible performance bonus payment, and improvements to vehicle support subsidies, seeking an increase similar to that of Hyundai Motor. Hyundai Motor's last year's collective bargaining agreement raised the basic salary by 112,000 won and provided a performance bonus and quality improvement incentive totaling 18 million won, which is 500% of the basic salary.
The Hyundai Steel union is demanding improvements to the current system that provides approximately a 20% discount when purchasing Hyundai Motor Group vehicles. The union requested that vehicle purchase support funds be provided differentially based on years of service and that a 10 million won interest-free loan support be offered for two years when purchasing a vehicle. Additionally, they are asking for the provision of a 20% vehicle discount benefit every three years for retirees.
Hyundai Steel reported an operating profit of 314.4 billion won, a 61% decrease compared to the previous year. This is the lowest figure since 2002, excluding 2020 when normal business operations were disrupted due to the coronavirus disease (COVID-19). Hyundai Steel's operating profit in 2020 was 73 billion won, and in 2002, it was 292 billion won.
The 2023 performance, which serves as the basis for the ongoing collective bargaining agreement, has also significantly declined compared to the previous year. Hyundai Steel's operating profit for 2023 was 798.3 billion won, a 51% decrease from the previous year, while revenue fell by 5% to 25.91 trillion won. The company's performance has continued to deteriorate since 2021, when demand rebounded after COVID-19. In 2021, Hyundai Steel recorded revenue of 27.73 trillion won and an operating profit of 2.44 trillion won.
The outlook for the steel industry this year is bleak. Chinese steel companies are lowering prices to release inventory overseas due to weak domestic demand. China's steel demand is expected to decrease by 1-2% compared to the previous year.
In this situation, the fact that the United States announced a 25% tariff on imported steel is also a burden for Hyundai Steel. Hyundai Motor Securities noted, 'The American Iron and Steel Institute suggested strengthening steel tariffs during the election of President Trump,' adding that 'measures to strengthen trade barriers for steel may become a reality in the future.'