Samsung Electronics Vice Chairman and Device Solutions (DS) head Jun Young-Hyun, along with Device eXperience (DX) head Roh Tae-moon, issued a joint statement to all employees on the progress of wage negotiations on May 7, marking their first public remarks on the talks. The move comes as Samsung tries to defuse labor tensions ahead of a union strike deadline.
According to reports from ET News, Chosun Biz, and other media, Jun and Roh said in an internal notice titled that they understood workers' concerns and anxiety over the prolonged negotiations. They urged staff to ensure that the company's future competitiveness is not damaged and stressed that Samsung is continuing open communication in pursuit of a solution that employees can support.
South Korean media interpreted the statement as a sign that Samsung's leadership wants to resolve the crisis through dialogue, as the union's announced strike date of May 21 now looms just two weeks away. Attention is now on whether Samsung will hold a town hall meeting, allowing management to speak directly to employees.
In the letter, Jun and Roh said that Samsung had taken future competitiveness and business conditions into account during the talks and proposed alternatives in an effort to reach common ground with the union, but the sides have still not reached a final agreement. They expressed deep regret over that outcome and pledged responsible management to prevent Samsung from losing its competitiveness in a tough global business environment.
A labor dispute with national repercussions
Observers say Samsung is now facing pressure on both labor and management fronts, as the wage standoff continues while a wave of resignations from its union, led mainly by DX division employees, has emerged inside the company. Jun and Roh's joint statement suggests that the top management is moving urgently to contain the strike threat.
The resignation wave has weakened the union's representativeness and its ability to mobilize strikes. Some observers believe Samsung management is simply waiting for the union to split on its own.
The union is currently planning a general strike starting May 21 for 18 days. Analysts estimate that if the strike goes ahead, Samsung Electronics' losses could reach as much as KRW30 trillion (approx. US$20.5 billion).
Markets fear the strike would severely damage Samsung's semiconductor competitiveness and deliver a sharp blow to the South Korean economy.
With the planned strike approaching, South Korea's labor authorities are stepping in, with the chief of the Ministry of Employment and Labor's local branch meeting with the head of the Samsung Electronics Labor Union later today, according to the Korea Herald. Authorities have also proposed that both parties enter the post-mediation process to resolve their difficulties.
Samsung previously proposed breaking the existing cap on performance bonuses if the DS division achieved its goal of earning top place in the South Korean market. They also proposed setting aside more than 10% of operating profit as a bonus fund for employees in the memory business, where headcount is larger, and bonus ratios are lower. The union, however, insisted on the permanent removal of the performance bonus cap, causing negotiations to collapse.
Some in South Korea's financial sector noted that Samsung has already promised special rewards above the performance-bonus cap and has largely accepted the union's demands. However, they find the union's insistence on a "system change" as a pretext to halt negotiations difficult to understand.
Article translated by Lily Hess and edited by Jack Wu
