Industry Minister Kim Jung-kwan speaks during a meeting with representatives of the Federation of Korean Trade Unions in Yeongdeungpo District, western Seoul, on March 30. [NEWS1]
Industry Minister Kim Jung-kwan warned Thursday that the government may force management and labor at Samsung Electronics into emergency arbitration if a planned strike at the company goes ahead.
With members of two major unions of the company’s workers set to begin an indefinite general strike on May 21, Kim said government intervention could become unavoidable given the semiconductor giant’s importance to the Korean economy.
“As minister of trade, industry and energy, I believe emergency arbitration would be unavoidable if a strike occurs,” Kim wrote in a Facebook post Thursday afternoon.
“Considering the seriousness of this matter and the unimaginable ripple effects it could have, we must prevent a strike under any circumstances,” he added.
Kim’s post came hours after the National Labor Relations Commission requested that Samsung Electronics management and labor resume talks.
Samsung Electronics accepted the request, but union representatives said there was little reason to continue discussions unless management changed its position on key demands, such as abolishing the company’s cap on bonuses and distributing 15 percent of the semiconductor division’s annual operating profit to workers.
Kim’s comments marked a shift from the government’s earlier reluctance to intervene directly in the labor dispute.
Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group United Union, speaks to reporters after attending a hearing at Suwon District Court in Suwon, Gyeonggi, on May 13. [YONHAP]
Only a day earlier, Labor Minister Kim Young-hoon sidestepped a question about emergency arbitration during a YouTube political talk show appearance, instead urging management and labor to continue talks “until the very end.”
Management and labor entered postmediation talks under the National Labor Relations Commission on Tuesday morning, but the 17-hour session was suspended early Wednesday at the union’s request.
“It is deeply regrettable and worrying that labor and management may fail to reach an agreement,” Kim said.
The industry minister warned that disruptions at Samsung Electronics could undermine one of Korea’s few remaining engines of growth.
“The importance of Samsung Electronics to our economy cannot be overstated,” he said. “The semiconductor industry, in particular, is virtually our country’s only key strategic asset and a unique growth engine that will shape Korea’s future, making the current situation even more concerning.”
He described semiconductors as a winner-takes-all industry defined by the speed and scale of investment. He noted that manufacturing upgrades take place every one to two years and that more than 60 trillion won ($43 billion) is required to build a single fabrication plant.
“Competing countries are expanding their positions in the semiconductor market through strong government support and bold investment,” Kim said. “A domestic player would not just fall to second place if it loses competitiveness — survival itself could become difficult.”
Kim also warned of severe economic damage if production at Samsung Electronics is disrupted.
The Samsung flag flies outside the headquarters of Samsung Electronics in Seocho District, southern Seoul, on May 13. [NEWS1]
“If a strike occurs under these circumstances, irreversible economic damage could result,” he said. “A factory shutdown could cause production losses of up to 1 trillion won per day.”
He added that semiconductor wafer processing takes more than five months and warned that damage to wafers currently in production could result in losses of as much as 100 trillion won.
“It is difficult even to fathom the damage that could spread to roughly 1,700 partner companies,” he said.
Beyond the immediate financial costs, Kim warned of longer-term reputational damage to Korea’s economy.
“What worries me even more than the enormous visible losses are the intangible national losses, including damage to trust in our economy,” he said. “The American Chamber of Commerce in Korea has already warned that disruptions at Samsung Electronics would damage Korea’s standing as a global partner, and pressure from foreign customers to relocate production facilities abroad would intensify.”
Kim urged both sides to return to negotiations as soon as possible.
“I earnestly urge both sides to resume communication without delay,” he said.
“Management must present a plan for fair compensation, while labor should seek a reasonable distribution that does not undermine the company’s future and sustainability,” Kim added. “I sincerely ask labor and management at Samsung Electronics — a company that represents our nation — to meet the earnest expectations of the Korean people, as well as countless domestic and overseas customers and investors.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
댓글
0