R$3 billion per day: what's behind the threat of a strike at Samsung and why it's so worrying

More than 45,000 Samsung workers could join the strike
REUTERS/Kim Hong-Ji/File Photo
South Korea intends to use all available options, including emergency arbitration, to avoid a strike at Samsung Electronics, the country's largest employer, and reduce possible impacts if the strike occurs. The statement was made this Sunday (18) by Prime Minister Kim Min-seok.
The world's largest memory chip manufacturer and the company's South Korean union are expected to resume salary negotiations this Tuesday (19), with government mediation - a move that could ease concerns about a possible strike at the technology giant, according to Reuters.
Samsung accounts for almost a quarter of the country's exports.
"Only one day of strike at the factory is expected of Samsung Electronics' semiconductors generates direct losses of up to 1 trillion won (about R$3.4 billion)", said Kim after an emergency meeting with ministers.
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The prime minister also warned of prolonged effects. "The most worrying thing is that a temporary interruption in semiconductor manufacturing lines could result in months of inactivity," he said.
According to him, the economic damage could reach 100 trillion won (R$335 billion) if materials need to be discarded because of the interruption.
Negotiations
Samsung and the union were already facing difficulties in reaching an agreement in the last rounds of negotiations. The expectation is to avoid the biggest strike in the company's history, with a potential participation of more than 45 thousand workers, according to Reuters.
The initial threat included a strike of up to 18 days, scheduled to begin on Thursday (21), amid a scenario of global shortage of memory chips - which increased concern about impacts on the South Korean economy and global supply chains.
Government-mediated talks had already failed in a first round, with the parties still far from understanding. The union claims to be committed to negotiations "in good faith", but maintains relevant demands.
Among the main points of impasse are bonuses and participation in results. Workers demand the end of the bonus cap equivalent to 50% of annual salaries and the allocation of 15% of operating profit for distribution among employees.
Samsung, in turn, proposed reserving between 9% and 10% of operating profit for bonuses, maintaining the current limit. According to estimates cited in the negotiations, the amounts involved could exceed 200 trillion won this year.
Judicial pressure and economic risk
To increase pressure, the company obtained a partial injunction from South Korean courts against actions considered illegal during the strike. The decision opens up the possibility of forcing some employees to work to avoid damage to production lines.
If they fail to comply with the decision, unions could be fined up to 100 million won per day, while union leaders could face daily penalties of 10 million won.
Even so, workers' representatives claim that the decision does not prevent the strike from taking place if negotiations fail again.
The country's authorities have shown increasing concern about the impasse. A possible shutdown is seen as a relevant risk for South Korea's economic growth, exports and financial markets.
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Source: G1

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