Samsung Electronics' largest union said on Friday it would hold a massive strike as planned next week despite the company's offer to restart negotiations without preconditions. Earlier in the day, Samsung Electronics management issued a formal proposal to the union, which was seen as the latest effort by management to avoid an 18-day strike originally scheduled to start next Thursday. The strike could disrupt production at the world's largest memory chip maker.
But the union reiterated that it has no intention of entering into further talks unless its key demands over performance bonuses are resolved ahead of a new round of government-brokered talks due on Saturday.
"We are willing to discuss it after June 7," Choi Seung-ho, chairman of Samsung Electronics' largest union, said, referring to the day after the planned strike ends. "We intend to exercise our rights guaranteed by the Constitution."
Two days of government-led mediation talks ended on Wednesday without an agreement between labor and management. In the current memory super cycle, Samsung Electronics' labor and management still have serious differences over the issue of performance bonuses linked to the profitability of the company's artificial intelligence (AI)-related semiconductor business.
According to the latest official document sent to the union, Samsung Electronics management proposed to maintain the existing excess profit incentive mechanism while allowing the calculation method of the bonus pool to be changed to be based on 10% of operating profit or economic value added (EVA). The company also proposed introducing a special compensation system, saying it would help create a more flexible incentive structure.
In contrast, the union demanded that the company pay a fixed performance bonus equal to 15% of the semiconductor unit's operating profit and remove the cap on bonus payments.
Late on Friday, Samsung Electronics executives again urged unions to resume wage negotiations and apologized for the concern the matter has caused the public and the government.
"We regard our unions as family members and partners in a community with a shared future, and we will negotiate with an open attitude and without any preconditions," the statement said.
However, Samsung Electronics management still has not come up with any new solutions to the union's demands.
Choi Seung-ho previously said that about 41,000 union members have expressed interest in participating in the planned general strike, adding that the number of participants could exceed 50,000.
The South Korean government has said a strike at Samsung Electronics should be avoided at all costs, warning it could pose a significant risk to economic growth.
Observers pointed out that if a general strike occurs, the economic losses of South Korea, which relies heavily on exports, may be as high as 100 trillion won (approximately US$66.7 billion).