Samsung Electronics and its largest labor union are set to resume negotiations Monday to avert a strike that the nation¡¯s prime minister warned could wreak havoc on the economy.?
Management and the union representatives at the world¡¯s biggest memory chipmaker will meet for the talks on wages and compensation, with Samsung having reported operating profit that soared on artificial intelligence-driven demand for its semiconductors.?
¡°Along with the entire public, we earnestly request Samsung¡¯s management and union to achieve results during the mediation tomorrow, which is virtually the last chance,¡± Prime Minister Kim Min-Seok said in an address to the nation on Sunday. ¡°If the strike becomes a reality, the economic damage that we have to face would be unimaginable.¡±
The negotiations, in which the head of the government¡¯s labor relations commission will take part, come three days ahead of the union¡¯s May 21 deadline for an agreement, before it stages an 18-day walkout.?
Kim estimated the labor action would cost up to 1 trillion won ($668 million) for every day the Samsung chip factory is shut. ??
The prime minister signaled for the first time that the government could resort to emergency powers to prevent a strike if the parties fail to reach an agreement. Kim said the government would pursue ¡°all measures including emergency powers¡± in order to protect the national economy if the labor action threatened the economy. ?
Samsung Electronics Chair Jay Y. Lee issued a rare apology on the weekend for the company¡¯s ¡°internal issues¡± causing concern.
¡°Now is the time to wisely gather our strengths and move in one direction,¡± Lee said Saturday at Seoul¡¯s Gimpo International Airport as he returned from an overseas trip, according a Yonhap News report. ¡°Union members, Samsung family members, we are one body, one family,¡±
Government-mediated negotiations broke down earlier this month, with management and the union unable to bridge a gap between the workers¡¯ demands and executives¡¯ offers.
The workers¡¯ group is calling on Samsung to expand performance-based compensation as earnings rebound on AI infrastructure demand. Labor leaders want Samsung to scrap an existing cap on bonuses, allocate 15% of operating profit to worker bonuses, and to formalize the terms in employment contracts.?
Samsung has proposed allocating 10% of operating profit to bonuses, along with a one-time special compensation package that exceeds industry standards. Company executives have argued that the union¡¯s demands would be difficult to sustain over the long term.
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