In the Strike Zone at Samsung Display
Last May Lee Jae-yong, the Vice-Chairman and heir to Samsung Electronics, made a public apology concerning the ‘irregularities’ surrounding his inheritance of managerial rights at Samsung Group (pvt) and its policy of suppressing labor unions. In that speech he promised to abide by the law and stated that “there’s no more controversy about the issue of management succession.” On the topic of Samsung’s intolerance of labor unions, Lee said, “The culture of labor-management relations at Samsung has failed to keep up with the changing times. I will ensure that the phrase ‘no union management’ is no longer used at Samsung,” but in January of this year he was sentenced to finish a 2.5 year term in prison for bribery, and currently resides at the Seoul Detention Center.
While the promises he made before his sentencing were likely carefully screened by Samsung’s legal department and worded as vaguely as possible, Samsung Display (pvt), the company’s display production affiliate, allowed the formation of a union in February 2020, which now has ~2,400 members, or ~13% of the affiliates workforce. Unfortunately, things have not been going smoothly concerning talks between the union and company management, and a disagreement on the 6.8% wage increase the union has asked for and the company’s 4.5% increase proposal has not been resolved, along with an increase in hazardous duty pay, which has been frozen for 10 years. Workers received a 2.5% increase last year and a 3.5% increase in 2019.
As these negotiations are the subject of close scrutiny, the outcome could set the tone for union formation and negotiations at other Samsung affiliates, particularly while Lee remains in prison. The compliance committee that was set up as part of a court order forcing the company to abide by labor laws, is facing considerable pressure to resolve the situation, however union members rejected the company’s proposal and a subsequent vote by union members decided by a 91% positive vote, to take collective action against Samsung Display management. The union is planning a strike for June 21.
While strikes are usually ugly affairs with shouting mobs and nasty placards, this strike will be a bit different, starting with six union members and increasing gradually, as this would be the first union strike at a Samsung affiliate, but the union did suspend mediation after deciding that the differences between the two parties were too difficult to resolve, opening the way for the walkout. SDC managers have kindly given the union a list of the minimum number of workers needed to keep the fab in operation, although it seems that it might take some time for the union to build to anywhere near that point, a rather polite but somewhat superior gesture .
Given the relatively low level of initial union involvement, at least as of June 21, we expect little impact on SDC’s production, however should the walkout expand and be sustained, it could put more stress on what is a relatively tight display market currently. As large SDC customers such as Apple and Samsung itself would not have time to requalify new producers or evaluate sample products, an expanded or extended strike could present an issue for release dates, but thus far, while the situation is far more volatile than it might have been in the past when Samsung management was able to squelch any worker disagreements, it still seems quite staid and civilized compared to strike at other companies in Asia and certainly more polite than those seen in the US.
While the promises he made before his sentencing were likely carefully screened by Samsung’s legal department and worded as vaguely as possible, Samsung Display (pvt), the company’s display production affiliate, allowed the formation of a union in February 2020, which now has ~2,400 members, or ~13% of the affiliates workforce. Unfortunately, things have not been going smoothly concerning talks between the union and company management, and a disagreement on the 6.8% wage increase the union has asked for and the company’s 4.5% increase proposal has not been resolved, along with an increase in hazardous duty pay, which has been frozen for 10 years. Workers received a 2.5% increase last year and a 3.5% increase in 2019.
As these negotiations are the subject of close scrutiny, the outcome could set the tone for union formation and negotiations at other Samsung affiliates, particularly while Lee remains in prison. The compliance committee that was set up as part of a court order forcing the company to abide by labor laws, is facing considerable pressure to resolve the situation, however union members rejected the company’s proposal and a subsequent vote by union members decided by a 91% positive vote, to take collective action against Samsung Display management. The union is planning a strike for June 21.
While strikes are usually ugly affairs with shouting mobs and nasty placards, this strike will be a bit different, starting with six union members and increasing gradually, as this would be the first union strike at a Samsung affiliate, but the union did suspend mediation after deciding that the differences between the two parties were too difficult to resolve, opening the way for the walkout. SDC managers have kindly given the union a list of the minimum number of workers needed to keep the fab in operation, although it seems that it might take some time for the union to build to anywhere near that point, a rather polite but somewhat superior gesture .
Given the relatively low level of initial union involvement, at least as of June 21, we expect little impact on SDC’s production, however should the walkout expand and be sustained, it could put more stress on what is a relatively tight display market currently. As large SDC customers such as Apple and Samsung itself would not have time to requalify new producers or evaluate sample products, an expanded or extended strike could present an issue for release dates, but thus far, while the situation is far more volatile than it might have been in the past when Samsung management was able to squelch any worker disagreements, it still seems quite staid and civilized compared to strike at other companies in Asia and certainly more polite than those seen in the US.
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