Samsung Electronics (005930.KS) and its labor union held last-ditch wage renegotiations 10 days before a planned general strike but failed to narrow their differences.
If this round of talks — effectively the final renegotiation procedure before the strike — fails to produce an agreement, the union will move forward in earnest with its previously announced strike.
According to industry sources on Oct. 11, the National Labor Relations Commission (NLRC) ended a roughly 12-hour post-adjustment meeting between Samsung Electronics' labor and management at the Government Complex Sejong without reaching an agreement. The NLRC plans to reconvene the meeting on Oct. 12 and prepare a mediation proposal at the commission level. A settlement can be reached only if both labor and management agree to the proposal.
The NLRC said both sides at Samsung Electronics are willing to engage in dialogue, but differences remain over key issues. The union has maintained its position that 15% of operating profit should be paid as performance bonuses and that the cap on performance bonuses should be abolished. The NLRC arranged this two-day post-adjustment process on Oct. 11 and 12 to mediate between Samsung Electronics' labor and management, whose conflict had escalated after the collapse of collective wage bargaining, but the outcome remains uncertain.
The union has warned that it will launch a general strike on Oct. 21 if management does not accept its demands. Global investment bank JP Morgan forecast that if the Samsung Electronics strike materializes, losses could reach 40 trillion won on an annual operating profit basis.
In particular, significant disruptions are expected to Samsung Electronics' memory sales strategy targeting global Big Tech firms. The American Chamber of Commerce in Korea (AMCHAM), whose members include U.S. Big Tech customers, warned on Oct. 11 that "there is a possibility that global companies' moves to diversify their supply chains will accelerate further, and competing countries may reap windfall benefits," adding that the supply chains for key components such as memory that rely on Samsung Electronics could be shifted to other manufacturers.
