As some of you might have heard, there’s an ongoing union dispute taking place at one of Samsung’s chip plants in South Korea. If the demands of the workers are not met by May 21, this could turn into an 18-day general strike. Now, it looks like the board chairman of Samsung is stepping in, urging the union to resolve pay disputes before it goes too far.
Samsung board chairman urges pay disputes to be resolved
A Reuters report quotes an internal memo Samsung’s board chairman, Shin Je-yoon, sent to employees on Tuesday. The memo reveals Shin’s concern that the company could lose market leadership if the Samsung union pay disputes aren’t resolved. He also expressed worry that customers could flee and Samsung could lose their competitiveness.
For those unfamiliar, this dispute is taking place at Samsung’s Pyeongtaek chip plant in South Korea. So, any disruptions could cause production delays, which means shortages and soaring prices, all of which could result in us, the customers, footing the bill. Now, 18 days doesn’t seem particularly long, but it’s more complicated than that.
If both parties cannot reach an agreement, operations will grind to a halt for 18 days. But it doesn’t mean that after that the machines just turn back on. These machines require constant maintenance. Failure to do so could result in operations halted for close to two months. It is estimated that it could take up to 36 days to restore things back to regular production levels.
What are workers striking about?
In this case, it’s about their pay. Samsung currently has a performance-based pay cap, which union workers aren’t happy about. They are demanding that Samsung remove the cap. They are also calling on the company to allocate 15% of its operating profit as performance bonuses.
The workers are pointing at other local companies, such as SK Hynix, which have paid out record-breaking compensation to their own workers. On their end, Samsung has tried to negotiate with better compensation packages. However, it looks like it might not be enough. The clock is ticking. Samsung now has to decide if paying its workers what they’re asking for is cheaper than its operations coming to a standstill.
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