Samsung Electronics urges union to resume talks as strike threat looms

By Hyunjoo Jin

SEOUL, May 14 (Reuters) – Samsung Electronics on Thursday proposed that its South Korean labour union resume pay talks after government-mediated negotiations fell apart, a union leader said, citing a letter from the company.

South Korea’s Labour Commission also called on the two sides to hold another round of government-mediated talks on Saturday in a bid to avert a threatened lengthy strike.

“There is no reason to continue the dialogue without institutionalisation and transparency,” union representative Choi Seung-ho said in response to the letter, referring to the union’s demand for an overhaul of Samsung’s bonus scheme.

Choi later posted a reply that he said was sent to management on Thursday, pledging to sit down for talks if the company presents a detailed proposal that addresses the union demand for a transparent and codified profit-sharing plan.

If there is no reply by 10 a.m. (0100 GMT) on Friday, the union will go ahead with a planned strike, it said.

Angry over what it calls a massive gap in bonus pay with chipmaker SK Hynix, the union has threatened an 18-day strike from May 21 if its demands are not met.

Samsung Electronics in a statement said that while the government-mediated process had ended: “We will continue engaging in dialogue to ensure the 2026 wage negotiations are resolved smoothly.”

Finance Minister Koo Yun-cheol said on Thursday that a strike should be averted no matter what, saying it would be a significant risk to South Korea’s economic growth, exports and markets.

The economy has become increasingly dependent on booming chip exports. Semiconductors accounted for 37% of the country’s exports in ​April, up from 20% a year earlier, according to government data.

In a report, JPMorgan said that the production impact of a strike could be higher than previously anticipated, reflecting the union’s expectation of broader worker participation.

JPMorgan estimated the impact on Samsung’s operating profit at 21 trillion won to 31 trillion won ($14.08 billion to $20.79 billion), while sales opportunity losses could stand at about 4.5 trillion won.

Samsung started reducing chip production on Thursday ahead of a possible strike, newspaper MoneyToday reported, citing industry sources.

“Samsung is examining all possible options to ensure that production is not disrupted in the event of a strike,” Samsung said in a statement.

($1 = 1,491.2000 won)

(Reporting by Hyunjoo Jin, Jack Kim and Heekyong Yang; Editing by Ed Davies)