Samsung Electronics (005930.KS) shares plunged nearly 4% during intraday trading on Thursday as concerns over a general strike by the company's labor union became reality. Labor and management entered negotiations lasting more than 50 hours over issues including the distribution ratio of performance bonus funds, but failed to reach a final agreement. After the union announced it would proceed with a general strike on the 21st as planned, selling pressure intensified, compounded by existing profit-taking pressure and concerns over damaged profitability.
According to the Korea Exchange, Samsung Electronics shares were trading at 267,750 won as of 11:50 a.m. on the 20th, down 8,000 won, or 2.90%, from the previous trading day. Although the stock rose to 282,500 won in early trading after semiconductor stocks including Micron closed higher overnight on the New York Stock Exchange, it later turned downward. The stock at one point fell to 263,500 won, breaching the 270,000 won threshold.
The sharp downturn in Samsung Electronics' share price is closely tied to the breakdown of performance bonus negotiations between labor and management. Choi Seung-ho, chairman of the Samsung Electronics branch of the Supra-Corporate Labor Union, said in a statement released that day, "Management ultimately did not state its position on the mediation proposal presented by the National Labor Relations Commission (NLRC), and the post-mediation process was terminated by the NLRC's procedures." He added, "The labor union will lawfully proceed with a general strike tomorrow as planned."
The result came after more than 50 hours of second-round post-mediation negotiations presided over by the NLRC failed to narrow differences on key issues. The union has maintained that, when distributing operating profit as performance bonuses, 70% of the total should be evenly divided among business divisions within the DS (Device Solutions) division, with the remaining 30% paid out differentially based on performance. However, management argued it could consider allocating 40% to the entire division and 60% to individual business units, and the discussions ran on parallel tracks.
As the union strike became reality, selling pressure has been concentrated among investors concerned about damage to company-wide profitability. With foreign investors' profit-taking pressure also having continued recently, intensifying labor-management conflict is expected to add to short-term burdens on the share price.
