Ugly Overuse of Power
POSCO’s employees and executives at the headquarters is creating controversy over overusing their power. This is because the fact that they have received free golf games and sexual favors from overseas subcontractors for years has been recently brought to light.
The POSCO’s employees and executives were dispatched to its continuous galvanizing line (CGL) plant in Rayong, Thailand, which was constructed in Septeber last year. They, including the branch manager at the plant, reportedly called management of local subcontractors to play golf together, and golf games led to drinking parties and massage parlors. Subcontractors said that they provided special favors 47 times in four months, which was worth 200 million won (US$17,528). They forced the subcontractors to offer special favors two to three times a week on average.
In addition, an official from a subcontractor claimed that POSCO’s senior executive forced the company to employ his friend and pay nearly 400 million won (US$35,000) for a monthly salary. POSCO overused its power and controlled subcontractors at its pleasure, instead of “cooperation.”
In this process, some subcontractors, which were under threat of bankruptcy, sent a petition to POSCO. POSCO didn’t take any action, but rather it reportedly asked them not to speak at all about it.
POSCO CEO Kwon Oh-joon said last year, “Thailand is the hub of the ASEAN Economic Community (AEC), and it is positioning itself as the automotive production base in Southeast Asia as well as the center of the home appliances industry.” However, there is a controversy over POSCO’s ethical management once again due to misconduct of the company’s executives and employees at the headquarters who were sent to Thailand’s CGL plant that was its pride and joy.