Here is the English translation of the article:
Samsung Electronics’ management and labor reached a dramatic agreement on improving the performance incentive system on May 20, just 1.5 hours before the general strike scheduled on May 21. By hammering out a compromise through two days of marathon “endgame” negotiations mediated by the government, the company narrowly avoided an unprecedented crisis: a total shutdown of its semiconductor production lines.
Following three days of post-mediation adjustment meetings held at the Gyeonggi Regional Employment and Labor Administration, the management and labor union finalized a draft agreement. This breakthrough comes five months after negotiations first began in December last year. The two sides, which had been locked in a tense standoff, successfully ironed out their final differences during this mediation session, spurred by the government’s active intervention and recommendations. The labor union plans to put the tentative agreement to a vote among its members.
Strategic Compromises and External Pressures
Observers note that both sides stepped back to prioritize practical gains regarding the institutionalization of performance incentives, which had been the biggest hurdle in the negotiations. Analysts point out that a public apology from Samsung Electronics Chairman Lee Jae-yong and strong pressure from the government served as key catalysts for the breakthrough. As the labor dispute recently escalated toward an all-out strike, Chairman Lee deeply apologized for causing concern to the public, shareholders, and employees, delivering a message that urged sincere dialogue and a win-win resolution. Even President Lee Jae-myung stepped in to pressure the union, stating, “Corporate management rights must be respected just as much as labor rights.”
Avoiding a Trillion-Won-a-Day Catastrophe
With the agreement now in hand, the union is expected to call off the general strike that was scheduled to last for 18 days starting on May 21. Industry insiders had predicted that if the strike became a reality, a halt in semiconductor line operations would lead to unavoidable losses of up to 1 trillion won per day. Global investment bank JP Morgan also analyzed in a recent report that a prolonged strike could slash Samsung Electronics’ annual operating profit by more than 40 trillion won. Free from this looming threat, Samsung Electronics can now accelerate its return to normal operations amid global supply chain uncertainties.
An industry official commented:
“It is a relief that the worst-case scenario of a strike was avoided during this golden window for a semiconductor market recovery. Samsung Electronics has managed to maintain its performance-based principles while finding a new equilibrium for win-win labor-management cooperation.”
Reporters: Chae-yeon Kim / Yong-hee Kwak / Jong-hwan Won (Sejong)
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