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https://m.koreaherald.com/article/10738302
South Korea’s industry minister said Thursday that the government may have no choice but to invoke emergency arbitration powers if Samsung Electronics’ labor union proceeds with a planned strike.
Minister of Trade, Industry and Energy Kim Jung-kwan made the remarks after the National Labor Relations Commission, a quasi-judicial agency under the Labor Ministry, said Thursday that it had asked Samsung Electronics and the union to resume suspended mediation talks on Saturday.
Samsung accepted the request, but the union said further negotiations would be meaningless unless management changes its stance.
“Given the gravity of this matter and the unimaginable ripple effects it could cause, a strike must be prevented under any circumstances,” Kim said in a post on X. “As industry minister, I believe emergency arbitration would be unavoidable if a strike takes place.”
Under South Korean law, emergency arbitration allows the government to suspend strikes or other collective labor actions when they are deemed likely to seriously endanger the national economy or public welfare.
However, emergency arbitration powers can only be invoked after a strike has begun, meaning losses could still be unavoidable if the union follows through on its planned walkout on May 21.
If invoked, it would mark the first use of emergency arbitration powers in 21 years.
The measure has been used only four times since its introduction in 1963, including during a 1969 strike at the now-defunct Korea Shipbuilding Corp., a 1993 strike at Hyundai Motor Co., and pilot strikes at Asiana Airlines and Korean Air in 2005; the most recent cases.
“I strongly urge both labor and management to resume talks as soon as possible,” Kim said. “I cannot help but feel deep concern and regret over the prospect of a general strike beginning May 21 if the two sides fail to reach an agreement.”
Kim called on the company to “offer reasonable compensation,” while urging the union to “seek a reasonable distribution that does not undermine the company’s future and sustainability.”
The union has warned that it will proceed with an 18-day general strike from May 21 through June 7 unless its demands are met. The two-day follow-up mediation talks collapsed Wednesday after Samsung Electronics’ union negotiators walked out.
The company and the labor union remain at odds over issues including the size of the performance-based bonus pool and whether to scrap caps on bonus payouts.
Kim also stressed Samsung Electronics’ weight in the South Korean economy, citing revenue equivalent to roughly 12.5 percent of GDP, 129,000 employees and about 4.6 million shareholders.
Kim warned that any strike could cause “irreversible economic damage,” including production disruptions of up to 1 trillion won a day if factories are halted. Kim further pointed out that wafer processing takes more than five months and that damage to all wafers currently in production could result in losses of up to 100 trillion won.
Kim added "The damage to more than 1,700 suppliers would be unimaginable,”
“The semiconductor industry is a winner-takes-all business that competes on the speed and scale of investment,” Kim said. “Companies must innovate their processes every one to two years and invest more than 60 trillion won to build a single fab in order to survive.”
Kim underscored the potential damage a strike could inflict on Samsung at a time when “rival countries are expanding their foothold in the semiconductor market on the back of strong government support and aggressive investment.”
“The moment competitiveness is lost, it is not a matter of falling to second place, survival itself becomes difficult.”
Kim said he was more concerned about “intangible national losses,” including damage to confidence in the South Korean economy, than the visible financial losses.
“First, a decline in confidence in global supply chains would be inevitable,” Kim said, citing a Monday statement by the American Chamber of Commerce in Korea that warned production disruptions at Samsung Electronics could damage South Korea’s standing as a reliable global partner.
“Pressure from foreign customers to relocate production facilities overseas would also intensify,” Kim said. “Our valuable jobs and income would disappear.”