The largest union at Samsung Electronics Co. has gone on strike for the primary time in the corporate’s 55-year history, however the dispute over wages has turn into so entrenched that either side have broken off all talks.
The National Samsung Electronics Union, the most important of the tech giant’s several unions with around 28,400 employees, asked its members to take a day without work on Friday, which is between a Thursday and the weekend, with normal working hours to resume next week.
“This is a soft start and a symbolic step,” Lee Hyun-kuk, deputy secretary general of the union, told Bloomberg News. “But we are planning further strikes if management refuses to communicate. We are not ruling out a full-scale general strike.”
Union leaders gathered outside Samsung’s office constructing in Seoul on Friday. One of them spoke to a neighborhood television station. A bus draped with an enormous white protest banner was parked outside the constructing. Placards read the employees’ appeals, but the gang was largely calm.
This is in contrast to violent strikes at automakers which were common in South Korea prior to now. In 2009, employees at Ssangyong Motor Co. seized control of a plant for months, using iron pipes and Molotov cocktails to fight police armed with tear gas and water cannon. The head of the [hotlink]Hyundai Motor[/hotlink] Union even cut off With his little finger he expressed his desire to realize essentially the most favorable result for himself within the negotiations between employees and employers.
The current dispute is over bonus payments for Samsung employees. Workers in the corporate’s semiconductor division didn’t receive such extra payments last 12 months, when the division lost around 15 trillion won. They fear they may not receive any bonus payments this 12 months, even when the division becomes profitable again, said union leader Son Woo-mok.
Samsung calculates its employees’ bonuses using an advanced formula that subtracts capital costs from operating profit and adjusts for taxes on a money basis. The union is looking on the corporate to easily use operating profit like a few of its competitors – or be rather more transparent in determining those numbers, union leaders say.
Historically, bonuses have made up a good portion of an worker’s pay, so giving up this money can mean a big reduction in compensation.
The dispute is definitely about whether Samsung will give priority to shareholders’ profits or to employees’ contributions, says Kwun Seog Kyeun, a former professor on the business school at Hankuk University of Foreign Languages.
“The company has negotiated in good faith with the union and will continue to do so,” Samsung Electronics said in an announcement, adding that there had been no impact on production or management activities. The company also said the variety of employees off work on Friday was lower than on the identical day last 12 months.
Union leaders said it was impossible to find out the variety of employees participating within the one-day strike because they weren’t required to report it to the union. Some non-union employees are also taking the long weekend off, making it even tougher to find out the extent of the strike.
In March, Samsung’s works council agreed to a 5.1 percent pay increase after resolving differences in several rounds of negotiations. In the past, the corporate had set pay increases through a council made up of representatives from either side, but in recent talks the agreement was scrapped because management didn’t comply with an extra paid day without work it had demanded, union leaders say.
The strike comes as Samsung grapples with a lot of challenges. In 2023, the corporate’s operating profit plunged to a 15-year low as its chip division lost money. Smaller rival SK Hynix Inc. seized the lead within the suddenly red-hot marketplace for high-bandwidth memory chips, that are essential for training artificial intelligence models.
The share price of Samsung, one in every of the country’s hottest stocks, has fallen about 1% because the starting of the 12 months. On average, about one in 10 South Koreans owns a Samsung share, although about 1 million frustrated retail investors have dumped Samsung shares in 2023.
Lee Kun Hee, the late chairman of Samsung, went to great lengths to forestall the formation of unions. Jay Y. Lee, who later succeeded his father, apologized in 2020 to “everyone who was hurt on labor issues” and vowed to desert Samsung’s decades-old “no union” philosophy.
Analysts see Samsung’s strict control of union activism as a reason for the corporate’s success, whereas other corporations comparable to Hyundai have often faced militant union activism of their workplaces.
Union leaders and analysts expect Friday’s strike to have little impact on Samsung’s chip and electronics production lines.
“This strike will neither affect DRAM and NAND flash production nor cause supply shortages,” TrendForce said in a report last week.
