Lee Byung Chul's Famous Quote - "A Labor Union Would Be Recognized Over My Dead Body"
Samsung Electronics’ management and labor union have yet to reach a deal. The labor union plans to start its strike on 21 May.
Samsung’s labor union has warned that the strike could cause damages of about 1 trillion won per day.
My base case - I think the most likely scenario with regards to Samsung Electronics’ labor union dispute is an actual partial shutdown that could last one to several days.
I will never allow trade unions in my lifetime. A labor union would be recognized until I have dirt over my eyes (over my dead body). (Lee Byung Chul - Samsung Group’s late founder and grandfather of current Samsung Chairman Lee Jae-Yong)
There is a long history of labor union problems in Korea in the past several decades. They have mostly impacted other major companies such as Hyundai Motor (005380 KS) and KT Corp (030200 KS) in the past. One of my favorite stories involve KT’s militant labor union.
It is similar to the scene from the movie Mission Impossible 1 where Ethan Hunt (Tom Cruise) crawls through the ceiling vent and is suspended from the ceiling to access the mainframe terminal. Well, a few of KT’s militant labor union members several decades back crawled through the ceiling vent to break through the room where the management and the senior union members were trying to negotiate for last minute compromise on wages to cause major interruption.
Several decades have now passed and now the labor union is causing some serious problems at Samsung Electronics (005930 KS). The history of Samsung Group is notorious for having an anti-labor union policy. As a result, the Samsung Group continued to maintain anti-labor union policy for many more years. In fact, in the past four decades, Samsung Electronics virtually has had almost no major labor union related problems until this year.
This is the second strike at Samsung Electronics since the first one in 2024. Two years ago, there were about 5,000 union members participating. Now, there are about 48,000 union members that are expected to participate this time. Although the court ruled that safety facilities and security personnel must be maintained at normal levels, production disruptions may be inevitable.
Only about 7,000 essential personnel will be on duty. Only personnel responsible for managing safety protection facilities such as fire prevention, exhaust, and drainage systems and security tasks like preventing wafer deterioration are to be maintained as usual. Samsung Electronics’ labor union now plans to proceed with the strike on 21 May.
Samsung’s labor union has warned that the strike could cause damages of about 1 trillion won per day and if the strike were to begin on 21 May and continue for the entire 18 days, total losses could reach up to 30 trillion won.
Samsung Electronics labor union demanding higher bonuses/wages (Source: Google images)
As Samsung Electronics alone accounts for more than 20% of South Korea’s exports, if the strike lasts for several days/weeks, the damage would be monumental.
