Yonhap News.
Six major business groups on Tuesday called for the immediate invocation of emergency arbitration powers if a strike planned by the Samsung Electronics (005930.KS) labor union goes ahead in three days, warning of irreversible damage to the national economy and industrial ecosystem.
The Korea Enterprises Federation, together with the Korea Chamber of Commerce and Industry, the Federation of Korean Industries, the Korea International Trade Association, the Korea Federation of SMEs, and the Korea Mid-sized Enterprises Federation, issued the joint statement, saying that “damage to Samsung Electronics is already materializing even before the strike begins.”
“A large-scale strike goes beyond a simple labor-management dispute and risks causing national-level opportunity losses,” the business groups said. “If the strike proceeds, production disruptions will cause enormous damage, including loss of trust in the global supply chain, customer attrition, and a decline in the national credit rating.” They added that “given the nature of semiconductor processes that require 24-hour continuous operation, a strike-induced line shutdown could lead to mass disposal of wafers, equipment damage, and even major safety accidents such as chemical leaks.”
The business groups expressed concern that small and mid-sized partner companies could face management difficulties if the strike materializes, shaking the semiconductor value chain. “The damage from a general strike will not be confined within the company but could deal a direct blow to thousands of small and mid-sized partner companies and their workers, as well as the entire semiconductor materials, components, and equipment industries,” they said. “Partner companies could face cascading production halts and employment insecurity, and disruptions in semiconductor supply could lead to parts supply instability across the global electronics industry, weakening its market competitiveness.”
The potential contraction of the domestic capital market in the wake of the strike was also raised. “Samsung Electronics is the No. 1 company on the KOSPI, accounting for about 25% of the market’s total market capitalization,” the business groups said. “Losses from the strike will trigger a decline in the overall KOSPI index and accelerate foreign investor outflows, which could significantly contract the domestic capital market.”
The business groups argued that the size of the performance-based bonus demanded by the Samsung Electronics union is excessive. “How to utilize operating profit is generally a management decision made by the board of directors,” they said. “Even when a portion of corporate profits is paid to workers, various methods such as stock-based compensation are used on the premise of meeting certain conditions. The union’s demand for direct cash payments exceeding annual salaries is therefore inappropriate and excessive.” The union is demanding that 15% of operating profit be set aside as a source for performance-based bonuses and that the cap on such bonuses be removed.