Negotiation round failed: Strike at Samsung to begin on Thursday
Samsung and several trade unions have once again failed to agree on how and how many bonuses will be paid in the future. Now the record strike is looming.
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In South Korea, a final round of negotiations between Samsung and several trade unions has also failed, and now only the government can probably prevent a strike with potentially far-reaching consequences. This is reported by the Korea Times, adding that in the end, the main issue was whether bonus payments would be distributed evenly or if loss-making departments would be excluded. A total of more than 47,000 union members have announced their intention to participate in the work stoppage, but slightly more than 7,000 employees must still come to work to prevent quality defects and for safety-relevant tasks. The strike is scheduled to begin on Thursday and last for 18 days.
Bonuses for everyone, or tied to success?
At its core, the dispute is about how Samsung will share its record profits with employees. The unions are demanding that 15 percent of profits be used for bonuses. 70 percent of this should be distributed evenly among all departments, and the rest depending on the respective success of the departments, the newspaper explains. Samsung has now rejected this again, claiming to have accepted most of the demands, just not bonuses completely independent of performance: They are convinced “that abandoning such principles could negatively affect not only our company, but also other businesses and industries”.
Overall, the dispute is about a lot of money; according to Bloomberg, each employee could receive more than 340,000 euros if the unions prevail. The conflict is also fueled by competition; SK Hynix, for example, accepted a union demand for a compensation reform in the fall that includes higher bonuses. By 2027, the average annual bonuses per employee there could exceed 500,000 euros. For this reason alone, Samsung has already lost numerous employees to competitors, and the number of union members has increased sharply.
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A strike lasting 18 days has now been threatened. This would completely 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. This is also why the South Korean government has recently become involved in the negotiations; the Minister of Labor can suspend a strike for 30 days if it endangers the national economy or human lives. In the worst-case scenario, the strike could reduce South Korea's economic growth by 0.5 percentage points this year; according to Reuters, almost a quarter of the country's exports come from Samsung.
(mho)
