[비즈한국] Whispers are circulating within the business community over concerns of an "Anti-POSCO" sentiment by the Lee Jae-myung administration. Critics point out that POSCO Group Chairman Jang In-hwa is being excluded from various government events. The steel industry is currently facing a recession so severe that government support is urgently needed. If President Lee Jae-myung continues to sideline POSCO, the company’s future looks precarious. However, the prevailing atmosphere within POSCO is that there is no major issue, as Chairman Jang In-hwa was simply unable to attend due to his focus on safety management.
"Steel Isn't the Subject of Collaboration..."
On August 25 (local time), President Lee Jae-myung held a South Korea-U.S. summit with U.S. President Donald Trump at the White House in Washington, D.C. The heads of major domestic conglomerates accompanied President Lee as part of an economic delegation.
The economic delegation included Samsung Electronics005930 Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won (Chairman of the Korea Chamber of Commerce and Industry), Hyundai Motor Group Executive Chair Euisun Chung, LG Group Chairman Koo Kwang-mo, Hanwha Group Vice Chairman Kim Dong-kwan, Hanjin Group Chairman Cho Won-tae, GS Group Chairman Hur Tae-soo, CJ Group Chairman Lee Jay-hyun, HD Hyundai Group Senior Vice Chairman Chung Ki-sun, Doosan Enerbility034020 Chairman Park Jee-won, Celltrion068270 Group Chairman Seo Jung-jin, Korea Zinc Chairman Choi Yun-beom, and Naver CEO Choi Soo-yeon. For Lotte Group, Vice Chairman Kim Sang-hyun attended in place of Chairman Shin Dong-bin.
POSCO Group was not included in this economic delegation. Given that POSCO Group ranks 6th in the domestic business rankings, many consider this exclusion unusual. Companies smaller in scale, such as Celltrion, Korea Zinc, and Naver, were included in the delegation.
Previously, President Lee Jae-myung held a meeting with the heads of the top 5 conglomerates and the six major economic organizations in June. At that time, POSCO Group was excluded from the meeting on the grounds of being the 6th largest business group. In July, ahead of tariff negotiations with the U.S., President Lee met consecutively with business leaders such as Chairman Lee Jae-yong, Chairman Chey Tae-won, Chairman Euisun Chung, Chairman Koo Kwang-mo, and Vice Chairman Kim Dong-kwan, but did not meet with POSCO.
Following a recent industrial accident at POSCO E&C (formerly POSCO Construction), President Lee Jae-myung criticized POSCO’s management. In August, Presidential Spokesperson Kang Yu-jung stated, "President Lee Jae-myung has ordered a thorough review of whether POSCO E&C followed safety manuals, a detailed investigation into whether the accident could have been prevented, and the discovery and reporting of all legally available measures, including the revocation of construction licenses and bans on public bidding." The President further instructed officials to review and report additional punitive measures, such as punitive damages, to ensure industrial accidents do not recur.
Even during the Yoon Suk-yeol administration, there were times when an atmosphere of sidelining POSCO persisted. Former POSCO Group Chairman Choi Jeong-woo did not accompany former President Yoon Suk-yeol on any of his overseas trips. In contrast, since taking office in 2024, Chairman Jang In-hwa frequently joined former President Yoon's economic delegations. For this reason, the relationship between Chairman Jang and the Yoon Suk-yeol administration was considered friendly.
Chairman Jang In-hwa appears to be cooperating with President Lee Jae-myung's policies. As safety issues surfaced, POSCO Group launched a "Group Safety Special Diagnosis TF" directly under the Chairman in August. At a special safety inspection meeting on August 22, Chairman Jang emphasized, "Please listen to the voices on the ground so that all workers at group workplaces can work safely and return home safely, and strive for innovation in a safety management system where employees are both the agents of disaster prevention and guardians of each other." He also stressed the need to swiftly implement safety management innovation plans currently under review, such as establishing a safety-specialized company and a foundation for supporting families affected by industrial accidents.
However, within POSCO Group, there is a sentiment that the Lee Jae-myung administration is not intentionally sidelining the company. Chairman Jang In-hwa was invited to President Lee Jae-myung's national appointment ceremony but did not attend, citing his focus on safety management. His absence from the U.S. economic delegation is also understood to be because the steel industry was not the subject of the negotiations. A POSCO Holdings official stated, "Chairman Jang is currently devoting himself to safety management activities," adding, "There were instances where he was invited to major events but could not attend due to the urgency at the group level."
POSCO's Precarious Performance
Regardless of President Lee Jae-myung's intentions, there are voices of regret that Chairman Jang In-hwa was not included in this U.S. economic delegation. A business insider noted, "The U.S. has started a high-tariff policy on steel products, and the government and companies need to find a joint response. Given the derivative products manufactured with POSCO steel, the U.S. steel tariff policy has a massive impact on the domestic economy."
In June, President Trump decided to impose a 50% tariff on imported steel and aluminum products. POSCO is seeking countermeasures, such as increasing investments in local U.S. production facilities. The company is currently working with Hyundai Motor Group to build an electric furnace steel mill in Louisiana, USA. However, the steel industry believes it will take a considerable amount of time before POSCO's investment yields results.
In a conference call regarding its second-quarter earnings in July, POSCO Holdings stated, "Our exposure to the U.S. market is within 2%, and a significant portion of what we sold can still be profitable even after paying the 50% tariff." However, they added, "There is a concern that our sales could drop if domestic clients find their U.S. exports blocked."
POSCO Group's immediate performance is also lackluster. POSCO Holdings' revenue fell by 5.15% from 18.51 trillion won in the second quarter of last year to 17.556 trillion won in the second quarter of this year. During the same period, operating profit decreased by 19.28% from 752 billion won to 607 billion won. Given this climate and the impact of tariffs, a strong performance in the second half of the year cannot be guaranteed.
Ahn Dong-min, a senior researcher at Korea Investors Service, analyzed POSCO Group by stating, "The U.S. imposition of a 50% tariff on imported steel is expected to act as a burden on profitability by causing secondary ripple effects on supply and demand, such as pressure to lower prices from downstream customers with weak purchasing power." He added, "Considering the high level of investment execution and the burden of cash outflows due to strengthened shareholder return policies, the room for significant improvement in financial stability indices in the short term appears limited."
POSCO Holdings emphasized, "We completed a total of 11 restructuring projects in the first half of this year, generating approximately 350 billion won in cash. We plan to secure an additional 1 trillion won in cash through 47 restructuring projects in the second half of the year to enhance the group's financial soundness and elevate corporate value."