Choi Seung-ho, chairman of Samsung Electronics' largest labor union, speaks to reporters during a follow-up mediation session at the National Labor Relations Commission in Sejong, Tuesday. Yonhap
An additional round of wage negotiations between Samsung Electronics’ management and labor unions has collapsed on Wednesday, with the dispute spiraling towards an 18-day strike starting May 21 involving more than 40,000 employees, mostly from the company’s chipmaking division.
While the possibility of a last-minute settlement before the strike remains, concerns are growing over potential fallout from a walkout, with losses expected to reach 1 trillion won ($671 million) per day. Prolonged disruptions to semiconductor production lines could lead to structural damage for the company, including the possible loss of key clients such as Nvidia.
Samsung Electronics has filed an injunction with the Suwon District Court seeking to ban the planned labor actions, and the court is expected to issue its ruling before the strike begins. If the court accepts the request, the company may be able to avoid large-scale disruption, but problems could drag on longer under a reduced workforce maintained only by essential personnel.
According to the government and industry officials, the two-day follow-up mediation session arranged by the National Labor Relations Commission ended at around 3 a.m. without tangible outcomes.
Choi Seung-ho, the unions’ leader, declared the talks had broken down, saying the two sides had failed to narrow their differences and had waited for the government’s mediation proposal, "only to see the talks regress further."
The unions demanded that the company institutionalize its bonus system in order to improve transparency and predictability by legally guaranteeing the allocation of 15 percent of operating profit as the source for performance bonuses. The unions indicated that if the full 15 percent allocation is difficult, part of the compensation could be paid in shares.
Management maintained its position of distributing an amount equivalent to 10 percent of operating profit without fixing the ratio in its collective bargaining agreement. It is also rejecting the unions’ demand to remove the bonus cap, out of concerns that this may undermine investment momentum for future growth.
The government also attempted to mediate but failed as its plan maintained existing bonus system, according to Choi. The government took the view that accepting the unions’ demands in full may cause severe disruption to the wage systems in Korean industries, potentially deepening polarization between large and small companies.
People enter Samsung Electronics' office in Seocho District, Seoul, April 30. Yonhap
Source: Korea Times News
