Negotiations failed: 18-day strike at Samsung increasingly likely

Crucial negotiations between Samsung and several unions have failed in South Korea, making an threatened 18-day strike starting next week increasingly likely. This is reported by the Korea Times, although the newspaper also writes that a last-minute agreement is still possible. Samsung has also appealed to the Suwon District Court to prevent the planned strike through legal means. The central point of contention, according to the report, remains the question of how Samsung employees will share in the record profits thanks to the AI boom. Samsung wants to link potential bonuses more closely to performance, while the unions demand that 15 percent of profits be used for special payments.

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The threatened strike would paralyze memory production at Samsung, with massive consequences for the industry and supply chains. According to the Korea Times, Samsung faces losses of up to 570 million euros per day. This is also why the South Korean government has recently participated in the negotiations, but has not supported the unions' demands. If the strike is not prevented by the court, the government could intervene, the news agency reports. The Minister of Labor could suspend a strike for 30 days if it endangers the national economy or human lives.

The conflict is also about a growing income gap with competing companies like SK Hynix. The semiconductor manufacturer accepted a union demand for a compensation reform in the fall, which includes higher bonuses. As a result, the number of Samsung employees belonging to a union has surged. Furthermore, Samsung has lost numerous employees to competitors. If the unions enforce their demands, an average of more than 340,000 euros would have to be paid out to each employee, Bloomberg has already calculated. Samsung had offered a wage increase of 6.2 percent and the reservation of 10 percent of profits for bonuses.

(mho)