Samsung Electronics Co. reached a tentative deal with its labor union late Wednesday night, averting what had threatened to be a crippling strike at the world’s largest memory chipmaker.
The South Korean company said in a statement late Wednesday that “labor and management have reached a tentative agreement on wages and the collective bargaining agreement.”
The company’s union also released a statement confirming the suspension of plans for a strike scheduled for May 21 to June 7. The union also notified members that they would participate in a vote on the tentative 2026 wage agreement from 9 a.m. on May 23 to 10 a.m. on May 28.
Photo: AP
About 48,000 Samsung Electronics workers are set to walk off the job today after talks on bonus payments broke off without a deal — a strike that threatens the health of South Korea’s economy and could hit the global chip supply.
Hopes for a deal in the not-too-distant future were kept alive, after discussions resumed late yesterday afternoon, now mediated by South Korean Minister of Employment and Labor Kim Young-hoon.
Earlier in the day, union leader Choi Seung-ho told reporters that the union had accepted a final proposal presented by the head of the National Labor Relations Commission, but the 18-day strike would go ahead, as management had not come around on one remaining sticking point.
“I would like to apologize to the public for not being able to produce a good result despite making as many concessions as possible,” he said, bowing and holding back tears. “We will not cease our efforts to reach a deal even during the strike.”
Samsung said in a statement that the union had insisted on “unacceptable demands” that included the size of bonuses for loss-making units.
“The reason an agreement could not be reached ... is that accepting the labor union’s excessive demands would undermine the fundamental principles of company management,” it said.
Samsung shares yesterday closed up 0.2 percent and have lost 2.8 percent for the week to date.
Some investors have said they are more concerned about the prospects of a permanent spike in labor costs than they are about the one-off costs of the strike.
Much attention would now turn to whether the government would step in and order emergency arbitration as it warned it might do over the weekend, citing the potential damage the strike could inflict on the economy.
Samsung accounts for almost one-quarter of South Korea’s exports and is also the world’s largest memorychip maker, so production disruptions are likely to further fuel price rises amid chip shortages.
An emergency arbitration order, which has been rarely employed, would put the strike on hold for 30 days while the government mediates talks.
However, a South Korean government official yesterday said that talk of emergency arbitration is premature and that there was still time for dialogue.
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