Strike seems increasingly likely: Emergency mode initiated at Samsung
Samsung's unions have rejected a new negotiation offer, and the company has intensified preparations for the threatened strike.
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At Samsung, everything is moving further towards an almost three-week strike, with potentially far-reaching consequences far beyond the company. On Friday, the largest of the unions involved rejected a new offer from Samsung for new negotiations without preconditions, reports the Korea Times. At the same time, preparations for the 18-day strike starting next Thursday are continuing. According to the employee representation, no further talks will be held until the central demands for bonus payments are considered. However, talks can resume after the strike.
Emergency mode at Samsung
At Samsung itself, an emergency mode has now been initiated, reports the Korea Herald. This includes the review of production adjustments and stabilization measures that can be implemented in the event of a strike. The company is thus reacting to the special risks of a strike for semiconductor manufacturing, which requires extensive preparations. Additionally, there has been a warning that production cannot be resumed immediately after the end of a potential strike. It may take two to three weeks after the 18 days for the highly automated production to run normally again, investment bank KB Securities has warned.
At the core of the dispute is how Samsung shares its record profits with its employees. The unions are demanding that 15 percent of the profits be used for bonuses. This is also intended to address a growing income gap with competing companies like SK Hynix. In the fall, the semiconductor manufacturer accepted a union demand for a compensation reform that 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.
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The threatened strike would paralyze memory production. The consequences for the industry and supply chains would be massive. According to media reports, the company alone faces losses of up to 570 million euros per day. For this reason too, South Korea's government has recently become involved in the negotiations but has not supported the unions' demands. Should the strike not be prevented otherwise, the government could even intervene itself. The Minister of Labor can suspend a strike for 30 days if it endangers the national economy or human lives. It is currently unclear whether this measure will be considered.
(mho)
