The Central Labor Relations Commission has urged Samsung Electronics to return to the negotiating table, but the union is maintaining its stance by insisting on the institutionalization of performance bonuses as a precondition. Analysts suggest that if the union chooses to strike despite the potential for a significant special compensation package, it may find itself at a disadvantage in the public relations battle.
On May 14, Samsung Electronics sent a formal letter titled "Proposal for Additional Dialogue Between Labor and Management" to the National Samsung Electronics Labor Union and the inter-company labor union. On the same day, the Central Labor Relations Commission also officially requested the resumption of post-adjustment meetings on May 16. Both the government and the company are calling for a return to negotiations. However, Choi Seung-ho, chairman of the inter-company labor union, stated, "There is no reason to engage in dialogue unless the institutionalization and transparency of performance bonuses are achieved," indicating that the union expects its demands to be met before negotiations can proceed.
The union is demanding that 15% of the operating profit be permanently allocated as a performance bonus for the Device Solutions (DS) division and that the current cap on the Operating Profit Incentive (OPI) be eliminated, formalizing these changes into the system. The Central Labor Relations Commission's proposal includes a provision that if the DS division achieves the highest operating profit in the country, 12% of the operating profit would be used for special bonuses in addition to the existing OPI, potentially amounting to around 40 trillion won in total compensation. Nevertheless, the union's rejection of this proposal is largely interpreted as a focus on securing a permanent profit-sharing structure rather than a one-time compensation this year.
Industry experts argue that the union's demands extend beyond simple wage negotiations and challenge the very principles of profit distribution within the company. Given that Samsung Electronics operates across various sectors, including semiconductors, foundries, mobile, home appliances, and automotive electronics, fixing the profit distribution structure during a boom in one division could lead to fairness issues among divisions. Concerns have also been raised that repeated demands for fixed distributions during downturns or periods requiring significant preemptive investments could subordinate management decisions to labor negotiations.
Samsung Electronics has reportedly entered an emergency management mode in anticipation of a potential strike. Since continuity is crucial in semiconductor processes, any actual production disruptions due to a strike could lead to issues with yield, delivery, and customer trust. Kim Young-hoon, Minister of Employment and Labor, emphasized the urgent need for dialogue, stating, "We must engage in discussions, even if it means staying up all night." As long as the union maintains its preconditions, the likelihood of resuming negotiations remains limited, with less than a week remaining until a general strike is scheduled for May 21.
* This article has been translated by AI.
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