Samsung Electronics union stages show of force ahead of general strike, drawing backlash from shareholders over demand for 15% of operating profit

[Financial News]"Give us 15% of operating profit as performance pay. If a general strike is held, the company will suffer losses of about 30 trillion won." (Samsung Electronics union)"Stop these unreasonable demands." (Samsung Electronics shareholder)The bonus dispute between management and labor at Samsung Electronics Co., Ltd. is now spreading into a conflict between the union and shareholders. In response to the union's large-scale rally, a shareholder coalition has announced a counter-rally at the same location.
If the union actually launches an 18-day general strike next month, losses worth tens of trillions of won are seen as unavoidable given the nature of the semiconductor business. The company has begun preparing a contingency plan for production disruptions, but it is reportedly insufficient to prevent major damage.
Samsung Electronics Co., Ltd.'s union continues to insist that it cannot accept the company's proposal to pay about 530 million won per person through special bonuses and other incentives, and that 15% of operating profit should be paid as performance pay.
The union plans to intensify pressure on management through a large-scale rally at Samsung Electronics Co., Ltd.'s Pyeongtaek Campus in Gyeonggi Province on the afternoon of the 23rd. Two days earlier, it began mobilizing support, saying that more than 38,000 employees plan to attend the rally. That amounts to about 30% of Samsung Electronics Co., Ltd.'s total workforce of roughly 128,881 as of the end of last year, and about half of the employees in the semiconductor division. With so many people expected to attend at once, work disruptions are likely. It is effectively a preview of a general strike.
The company has already sent an official notice to the supra-enterprise union and the National Samsung Electronics Labor Union, titled a request for cooperation in the normal maintenance and operation of safety protection facilities related to the rally on the 23rd. In the notice, it said it expects a reasonable and forward-looking proposal so that no human or material damage occurs due to a shortage of necessary personnel. An industry official said the rally on the 23rd could avoid production disruptions through measures such as assigning substitute workers, but added that if a general strike begins, plans will be needed to maintain production through overtime work and task adjustments.
Unease is also growing among Samsung Electronics Co., Ltd. employees. More workers are taking leave. Many non-union employees are reportedly choosing to take vacation rather than risk being labeled as rally absentees. Some say they would rather stay out of sight and use annual leave. Pressure on non-union workers has also increased, including a recent incident involving the creation and spread of a blacklist of non-union employees.
Through a YouTube broadcast, Choi Seung-ho, chairman of the supra-enterprise union, openly suggested that if forced reassignment or dismissal issues requiring future labor-management talks arise, workers who do not join the strike will be considered first for such measures. He indicated that non-participants could face disadvantages.
In response, Samsung Electronics Co., Ltd. shareholders are also taking collective action. They will hold a counter-rally directly across from the union's demonstration site.
At 10 a.m. that day, the Korea Shareholder Action Headquarters will hold a mass rally titled "Recovering Shareholder Rights at Samsung Electronics" near Samsung Electronics Co., Ltd.'s Pyeongtaek Campus, directly opposite the union rally.
If this year's projected operating profit of 30 trillion won is used as a basis, the bonus demand from the union would amount to about 4.5 trillion won. That is more than four times Samsung Electronics Co., Ltd.'s total dividend payout for this year, which stands at 1.1 trillion won. The shareholder group said shareholders are being completely excluded from the profit-sharing process and described the union's demand as "an outrageous demand." It argued that if the burden of fixed costs such as labor expenses increases instead of investment for future growth, corporate competitiveness will decline and ultimately hurt the stock price and dividends.
Earlier, on the 21st, the Samsung Compliance Committee also urged caution in dealing with the union. Chairman Chanhee Lee said, "Samsung is a company of the people, so the union should also be more careful by considering shareholders, investors, and the public." There are also concerns that if a general strike shuts down lines at major sites such as Giheung, Hwaseong, and Pyeongtaek, more than 400 partner companies could face management difficulties. Employees in the home appliance, TV, and mobile phone divisions, which are excluded from the discussion of bonuses in the hundreds of millions of won due to weak performance, are also said to feel a strong sense of relative deprivation.
Samsung Electronics Co., Ltd.'s union plans to stage an 18-day general strike from next month 21 to June 7 if its bonus demand is not accepted. According to the union's own estimate, the company's expected losses from a full strike would be about 30 trillion won.
ehcho@fnnews.com Jo Eun-hyo Reporter