The largest union at Samsung Electronics Co went on a strike for the first time in the company’s 55-year history, with the standoff over pay so entrenched that the two sides have stopped all discussions.
The National Samsung Electronics Union, the largest of the tech giant’s several unions with about 28,400 workers, encouraged members to take a single day off yesterday, which fell between a Thursday public holiday and the weekend. They plan to resume normal work hours next week.
“This is a soft start and a symbolic move,” union deputy secretary-general Lee Hyun-kuk told Bloomberg News. “But we have plans for subsequent strikes if the management refuses to communicate. We are not ruling out an all-out general strike.”
Photo: AFP
Union leaders gathered yesterday in front of Samsung’s office building in Seoul, with one speaking to a local television station. A bus draped in an enormous white protest banner was parked at the site. Placards carried worker appeals, but the crowd was largely muted.
That contrasts with violent walkouts at carmakers that were common in South Korea in the past. In 2009, workers at Ssangyong Motor Co took control of a plant for months, using iron pipes and Molotov cocktails to battle police armed with tear gas and water cannons.
At the heart of the dispute now are bonus payments for Samsung laborers. Workers in the company’s semiconductor division did not receive such extra payments last year, when the unit lost about 15 trillion won.
They fear they might not get bonuses again this year even if the division returns to profit, said union leader Son Woo-mok.
Samsung calculates workers’ bonuses with a complex formula that deducts its cost of capital from operating profit, adjusted for taxes on a cash basis.
The union is asking the company to simply use operating profit like some of its peers — or to be much more transparent in how it determines those numbers, union leaders said.
Historically, bonuses make up a significant portion of a worker’s pay, so missing out on such money can mean a meaningful reduction in compensation.
The dispute is really about whether Samsung would prioritize profits for shareholders or contributions from workers, said Kwun Seog-kyeun, a former business school professor at Hankuk University of Foreign Studies.
“The company has been, and will continue to be, in good faith in negotiations with the union,” Samsung Electronics said in a statement, adding that there has been no impact on production or management activities.
It also said the number of workers off yesterday is less than the comparable day last year.
Samsung’s labor management council in March said they would increase this year’s pay by 5.1 percent after narrowing their differences over several rounds of negotiations. The company has historically set pay increases through a council consisting of representatives from both sides.
However, the agreement was called off in the most recent talks, because management did not agree to an additional paid day off they demanded, union leaders said.
“This strike will not impact DRAM and NAND flash production, nor will it cause any shipment shortages,” Taipei-based market researcher TrendForce Corp (集邦科技) said in a report last week.
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