Prime minister urges Samsung Electronics, union to reach last-minute deal before strike

This article is by Jeong Jae-hong, Kim Ji-hye, Michael Lee and read by an artificial voice. Prime Minister Kim Min-seok urged Samsung Electronics and its labor unions to reach a last-minute agreement ahead of a planned general strike, warning that a walkout at the world's largest memory chipmaker could inflict "fatal damage" to Korea's economy in a rare public appeal Sunday. His speech came a day after Samsung Electronics and its largest labor union said they will return to the negotiating table on Monday in a last-ditch effort to avert a planned 18-day strike. Kim described Monday's negotiations as "effectively the last opportunity" to prevent a strike, warning that even a one-day disruption at Samsung's semiconductor facilities could result in up to 1 trillion won ($720 million) in direct losses, with broader damage potentially rising a hundredfold if ongoing wafer production is scrapped during a prolonged walkout. Noting that Samsung Electronics accounts for 22.8 percent of Korea's exports and 26 percent of total market capitalization, the prime minister warned the government is considering "all available measures," including invoking its emergency arbitration powers, to prevent a strike that could undermine the country's edge in the global artificial intelligence chip race. The renewal of talks mediated by the National Labor Relations Commission in Sejong comes after negotiations between management and labor collapsed on Wednesday amid persistent disagreements over bonuses tied to Samsung's booming semiconductor business. Samsung's largest labor union has said it plans to launch the strike on Thursday if management fails to commit to "fairly" distributing gains from the company's AI-driven recovery to workers. The union says more than 46,000 members have expressed willingness to participate. Samsung previously proposed performance bonuses equivalent to 607 percent of annual salaries for employees in its memory semiconductor business under the Device Solutions (DS) division, while proposing payouts between 50 and 100 percent for workers in loss-making non-memory semiconductor units, according to minutes from labor-management talks reported by Reuters on Saturday. However, the union side has demanded that the company scrap the cap on annual bonuses altogether and commit to distributing 15 percent of its annual operating profit to workers as compensation. The decision to resume talks follows a concession by Samsung management to the union's demand that it replace the company's lead negotiator. Vice President Kim Hyung-ro, who had represented management in earlier negotiations, will be replaced by Yeo Myung-koo, head of the People Team under Samsung's Device Solutions division, the company said. Samsung Electronics Executive Chairman Lee Jae-yong also issued a rare public apology on Saturday, widely seen as contributing to the labor side's decision to reengage in talks. Speaking after returning from a business trip to Japan, Lee said he would apologize to customers and the public for concerns caused by the company's "internal issues" and said he would "bear the full weight" of the crisis. Describing labor union members and all Samsung workers as "one body and one family," Lee said that "now is the time to wisely join forces and move in one direction." In response, Choi Seung-ho, head of the largest labor union, said workers had turned to organized labor because of eroding trust in management. "Employees joined the union because their trust in the company was broken," Choi said, calling on both sides to use the upcoming negotiations to restore confidence. Industry observers warn that losses could reach as high as 100 trillion won in a worst-case scenario involving a full production stoppage at Samsung Electronics. That figure includes damage to 1,754 suppliers of semiconductor materials, parts and equipment, as well as losses stemming from disruptions to global supply chains. The planned walkout comes at a delicate moment...