The largest labor union at Samsung Electronics in South Korea has declared an indefinite strike after a three-day walkout failed to yield any progress in a dispute over pay and bonuses. This action represents the largest labor action in the company’s 55-year history.
Also Read: US Introduces Ammunition Vending Machines in Grocery Stores
The National Samsung Electronics Union (NSEU) initiated a three-day general strike on July 8, 2024 involving 6,000 workers from the semiconductor division.
After the initial walkout did not result in any negotiations with management, the union declared an indefinite strike starting from July 10, 2024.
The union represents 31,000 members nearly a quarter of Samsung Electronics’ total workforce in South Korea.
The NSEU is campaigning for a transparent pay structure and improved working conditions including better bonuses.
Union leader Son Woomok addressed the need for the company to reflect its optimism in its financial outlook in employee compensation.
Despite high operating profits the company has been claiming a crisis situation for over a decade leading to growing dissatisfaction among employees over stagnant performance bonuses.
Samsung Electronics stated its commitment to engaging in good faith negotiations with the union and ensuring no disruptions in production lines.
The union claims that the company has shown no intention of holding talks over their demands.
Union leader Son Woomok said that it would take a long time to restore facilities shut down due to the strike.
The NSEU reported that about 6,500 workers participated in the strike disrupting production, although Samsung disputes these claims.
The dispute first came to public attention in June 2024, when the union staged a one-day strike following failed negotiations over pay and working conditions.
Samsung Group did not allow unions to represent its workers until 2020 following public scrutiny and legal issues involving the company’s leadership.
The strike comes at a time when Samsung Electronics is experiencing a resurgence in demand for mobile devices driven by the AI boom.
The company projected a more than 15-fold increase in its second-quarter operating profit compared to the same period the previous year largely due to rising prices of advanced chips.
Also Read: China’s BYD to Build $1 Billion EV Plant in Turkey
Samsung Electronics’ shares were trading flat to slightly lower on the Korea Stock Exchange following the union’s announcement.
The union has around 30,000 workers pushing for a 3.5% raise in base salary. This demand shows their desire to keep up with inflation.
Workers are also demanding an additional day off to commemorate the founding of their union. The union wants the company to compensate workers for any lost wages incurred during the strike.
The strike initially began as a three-day protest, but the lack of response from management made the union to extend it indefinitely.
Rounds of negotiations earlier this year failed to yield an agreement leading to tensions and the eventual strike.
This strike follows a one-day walkout in June, which was the first labor strike in Samsung Electronics’ history.
Lee Hyun-kuk, the vice-president of the National Samsung Electronics Union stated that they have not engaged in discussions with management since the strike began.
The union is confident of their victory and believes that the extended strike will eventually force management to negotiate.
Samsung Electronics has denied any disruption to production due to the strike. The company maintains that it is committed to good faith negotiations and ensuring no interruptions in production lines.
The union has reported that the strike is already affecting production on certain chip lines with some equipment running slower than usual.
Kim Jae Won, a worker in the memory chip division said that the unfairness of executives receiving large bonuses while regular workers saw no bonuses last year.
The NSEU believes that the longer the strike lasts, the more likely it is that management will be compelled to negotiate.
The union expressed confidence in achieving victory through industrial action. The union’s statement addressed that management will regret this decision of not coming to the negotiation table sooner.
Also Read: Boeing to Plead Guilty to Criminal Fraud Charge Over 737 MAX Crashes
