Samsung Electronics (005930) Chairman Lee Jae-yong issued a public apology on the 16th over the labor union dispute, after the union declared a general strike demanding performance-based pay equivalent to 15% of operating profit.
Arriving at the Gimpo Business Aviation Center in Seoul around 2:30 p.m. that day, Lee said, "I sincerely apologize to our customers around the world for causing anxiety and concern over an internal matter at our company." He added, "I bow my head in apology to the people of Korea, who have always supported, loved and pushed Samsung."
Lee, who had been on an overseas business trip, reportedly adjusted his schedule to return home after labor-management talks on performance pay broke down and lines of communication closed.
"To our union members and Samsung family, we are one body and one family," Lee said. "Now is the time to wisely pool our strength and move in one direction."
"I will take the brunt of the harsh wind and rain and accept all the blame," Lee said. "Let us do our best so that we can once again take pride in being part of Samsung."
"Finally, I want to thank the government and all those working hard to resolve our problems," Lee said. "I once again bow my head to our customers and the public to apologize for causing concern."
The Samsung Electronics union moved to launch a general strike from the 21st through June 7 after recent post-arbitration talks on performance pay, mediated by the National Labor Relations Commission, fell through. The union is demanding performance pay equal to 15% of this year's operating profit and the elimination of the cap on the Overall Performance Incentive (OPI), currently set at 50% of base annual salary. Based on this year's projected operating profit of about 340 trillion won (one-month consensus forecast), the demand would amount to roughly 51 trillion won. If management rejects the demand, the union plans an 18-day general strike beginning the 21st.
The union estimates a general strike at Samsung Electronics would cause 1 trillion won in damage per day and a total of about 30 trillion won including recovery costs. Industry analysts, however, say direct and indirect damages — including production line shutdowns, restoration costs and customer losses — could reach 100 trillion won.
With the strike just five days away, the government has stepped in, with Prime Minister Kim Min-seok and Employment and Labor Minister Kim Young-hoon urging a return to negotiations.
Labor Minister Kim visited Samsung Electronics' Pyeongtaek Campus the previous day and met with Choi Seung-ho, head of the Supra-Enterprise Union. The minister personally took on emergency mediation amid concerns over the national impact of the strike planned for the 21st.
Following the meeting with Minister Kim, the union left the door open for dialogue, conditioning resumed talks on management replacing its lead negotiator and making substantive changes to its position.
However, before the meeting with Minister Kim, the union reportedly maintained a hardline stance in talks with Vice Chairman Jun Young-hyun and other Device Solutions (DS) division presidents, saying it would not return to negotiations until after the strike ends on June 7 unless management changes its position on key issues.
Meanwhile, Industry Minister Kim Jung-kwan posted on social media that "an emergency adjustment would be unavoidable if a strike occurs." On this, Lee Kyu-yeon, senior presidential secretary for public communications, said, "He said what he had to say as industry minister," adding, "Given Samsung Electronics' major role in the national economy, we hope a situation like a strike does not arise."
