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Religious leaders read a statement at Pohang City Hall in North Gyeongsang Province, Tuesday, urging POSCO to establish its holding company in the city. Yonhap

By Park Jae-hyuk

POSCO's plan to set up a holding company in Seoul next month is expected to continue facing protests from the local community until the local elections in June, as politicians have been developing the conflict into a political issue to attract voters, according to industry officials, Tuesday.

Earlier this week, a taskforce led by the Pohang City Government in North Gyeongsang Province threatened to bring 30,000 residents to a massive rally in front of POSCO headquarters next Monday, unless POSCO Group Chairman Choi Jeong-woo responds to the requests to establish the holding firm and research facilities in the company's hometown and to make more contributions to the region.

As of Tuesday afternoon, POSCO remained silent about the requests, reiterating that the establishment of its holding company in Seoul will not cause an outflow of the workforce nor a reduction in tax revenue in Pohang.

"POSCO is a private enterprise with the right to make its own decisions," a POSCO official said. "It is unreasonable for the Pohang mayor to meddle with our management."

POSCO was initially founded as a state-run enterprise in 1968, but it was privatized in 2000.

Despite the company's insistence, the governments of North Gyeongsang Province and Daegu Metropolitan City have also opposed the establishment of POSCO's holding company in Seoul.

In addition, the four leading presidential candidates have all urged the company to reconsider its plan. In particular, Sim Sang-jung of the minor opposition Justice Party mentioned the issue directly on Monday, during the first of three TV debates by the National Election Commission.

Politicians in Gwangyang, South Jeolla Province, the site of another one of POSCO's steel mills, also raised their voices.

"Concerns are spreading across the local community over the possibilities of the steel manufacturing business being downgraded to a mere subsidiary and becoming less important than new businesses," Gwangyang City Council said in a statement, Tuesday.

The council members urged POSCO to prioritize investing in the city, when pushing ahead with new businesses related to secondary cells and hydrogen.

POSCO announced that day that its joint venture with POSCO Energy will invest 750 billion won ($628 million) to construct two more LNG storage tanks at Gwangyang LNG Terminal. In addition, the company reportedly advised its employees recently to change their KakaoTalk profile pictures to images containing slogans to appease Pohang residents.

Main opposition People Power Party Rep. Kim Byong-wook, who represents Pohang, said that whistleblowers told him that the company has been forcing its employees to change their social media profile pictures.

Some employees have hinted that the lawmaker's remarks were based on fact. Through Blind, an anonymous chat app for verified employees, they cynically expressed their gratitude to KakaoTalk for the recent introduction of the "multi-profile" function that allows users to set up different profiles for each contact.