Samsung strike talks collapse with chip supply chains in the balance…
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Samsung Electronics and its unions failed to reach a deal on Wednesday, leaving a threatened 18-day walkout set to begin on Thursday.
Last-ditch South Korean government-mediated talks collapsed today (20 May), leaving an 18-day strike at the world’s biggest memory chipmaker set to begin on Thursday. As SiliconRepublic.com reported on 18 May, Samsung Electronics and its unions had entered what prime minister Kim Min-seok described as a final round of negotiations to avert a walkout by over 45,000 workers.
Unions had accepted the Korean National Labour Relations Commission’s mediation proposal, but Samsung rejected it, reported CNBC, with shares falling by 4.4pc on the news, according to Bloomberg.
Samsung Electronics said it “deeply regrets” the breakdown in mediation talks, in a statement published by Korean financial outlet Money Today, adding that it “will not give up on dialogue until the last moment”.
The dispute centres on Samsung’s performance-based bonus system. Unions are seeking bonuses equivalent to 15pc of operating profit, the removal of a cap limiting payouts to 50pc of base salary and formal multi-year contractual guarantees. Samsung has consistently refused to meet those demands in full.
The economic stakes remain huge. The prime minister had estimated direct strike losses at 1trn won ($664.7m), potentially rising to 100trn won if chip production disruptions force Samsung to scrap wafers already in production.
Officials have so far declined to invoke emergency arbitration powers – which could suspend the strike for up to 30 days – with the labour commissioner saying mediation could still restart, according to Reuters.
A court injunction requires safety and facility staffing to remain at normal levels during any industrial action, which is expected to limit the immediate production impact.
The company accounts for 22.8pc of South Korea’s exports and revenue equivalent to 12.5pc of GDP. With talks over and the strike set to begin on Thursday, attention turns to whether Samsung management will make a fresh approach to the unions tonight – or whether the government will finally reach for its emergency powers.
Original article by:
Ann O’Dea is the CEO, co-founder and editor-in-chief of Silicon Republic
