A chilly-rolled metal line at Hyundai Metal’s Dangjin plant is empty following a strike by the corporate’s labor union on this Feb. 24 file picture. Courtesy of Hyundai Metal
Hyundai Metal declared emergency administration mode on Friday, slicing government salaries by 20 % and saying a voluntary retirement program for all staff.
The corporate mentioned the choice was pushed by the U.S. imposing a 25 % tariff on Korean metal imports and its personal declining profitability, because the home market faces rising competitors from Chinese language and Japanese rivals.
In line with the corporate, Hyundai Metal diminished all executives’ wages by 20 % as of Thursday and can implement cost-saving measures, together with minimizing abroad enterprise journeys, because it enters emergency administration mode.
The steelmaker additionally mentioned that it’s “contemplating” a voluntary redundancy program for all staff to “save prices to an excessive extent.”
Hyundai Metal defined the choice was made after recognizing that “it won’t be able to enhance its operations with out implementing strict self-improvement measures given the present enterprise atmosphere each in Korea and internationally.”
Hyundai Metal’s Incheon plant / Captured from the Hyundai Metal web site
The measures comply with the corporate’s latest cost-saving efforts. Because of the downturn within the home building market, Hyundai Metal has just lately scaled down operations at its second plant in Pohang. The corporate can be providing a voluntary retirement program for technical workers on the Pohang plant and accepting purposes for transfers to different crops in Incheon and Dangjin, South Chungcheong Province.
The corporate mentioned that low-priced metal merchandise from China and Japan are capturing its home market share, and it’s now responding with anti-dumping complaints, that are a kind of protectionist tariff.
In July and December final 12 months, Hyundai Metal filed anti-dumping complaints with the Commerce Fee of Korea’s Ministry of Commerce, Trade and Vitality, claiming that hot-rolled sheets and heavy plates from Chinese language and Japanese producers have harmed the home business. In response, the fee provisionally imposed anti-dumping tariffs of as much as 38 % on imports of Chinese language heavy plates final month.
The 25 % U.S. tariff on metal merchandise additionally poses a serious problem for the corporate. On Wednesday, U.S. President Donald Trump imposed a 25 % tariff on metal merchandise from Korea, successfully nullifying as much as 2.63 million tons of the annual tariff-free quota the U.S. had agreed to with Korea in 2018.
Final month, Korea Traders Service forecasted that home steelmakers would face a further value of as much as $890 million if the U.S. imposes a 25 % metals tariff as deliberate. Nevertheless, with the U.S. imposing tariffs on merchandise made with metal and aluminum, the associated fee seems to be increased than anticipated.
Including to the harm for Hyundai Metal is the continued battle with its labor union.
Hyundai Metal has been battling wage negotiations with the union since September of final 12 months, primarily as a consequence of points corresponding to efficiency bonuses. The union has staged a number of rounds of strikes and resumed its walkout on Wednesday in protest.
Hyundai Metal’s administration just lately proposed a efficiency bonus plan of a median of 26.5 million received per particular person, however the union rejected it, demanding increased will increase in base pay and incentives.
In January, Hyundai Metal reported 23.23 trillion received in income and 314.4 billion received in working revenue for the earlier 12 months, representing year-on-year declines of 10.4 % and 60.6 %, respectively. Nevertheless, on Feb. 24, the corporate revised its working revenue, lowering it by 80 % to 159.5 billion received, reflecting the affect of the efficiency bonus plan.
“Although we now have resumed negotiations on Thursday, we failed to achieve an settlement,” a Hyundai Metal official mentioned. “Given the continued labor dispute, we’re involved that the battle will inevitably have a detrimental affect on the home industrial sector.”
