Labor union threatens to shame Samsung Elec in show of brinkmanship

Samsung Electronics Co.'s biggest labor union under one of South Korea’s two major trade unions is objecting to the latest wage deal signed last month and demanding management renegotiate wage terms or else it will call for a worldwide boycott on all of the electronics giant’s products, a move inviting backlash from other workers.

The National Samsung Electronics Labor Union (NSEU), the largest of Samsung Electronics’ five unions with nearly 10,000 members, recently unveiled its plan on the company’s online notice board to divulge the company’s "atrocious" record in dealing with labor policies and reveal that it is fabricating its environmental, social and corporate governance report during an international event organized by IndustriALL Global Union, which will take place in Vietnam May 9-10.

The union under the Federation of Korean Trade Union (FKTU) will also launch a worldwide boycott of Samsung products and go on strike if management fails to come up with new wage terms by June when Samsung Electronics’ unionized workers will attend IndustriALL Global Union’s general assembly alongside the Korean Confederation of Trade Unions (KCTU), warned Kim Man-jae, the president of Korean Metal Workers’ Union under FKTU, during a protest in front of the global chip giant’s head office in Seocho-dong, Gangnam, in Seoul last Thursday.

Its demand for new wage terms comes after Samsung Electronics last month signed an agreement with an internal labor-management council for a 4.1% wage increase for this year.

The council is a consultative body comprised of representative employers and employees at Samsung Electronics to discuss working conditions, including wages.

The union condemned the deal because it was signed without consulting the labor unions. The council only has the authority to discuss workplace conditions but without collective bargaining rights, it argued, complaining that the council represents management, not employees.

But demands of the union representing 8.1% of Samsung Electronics’ workforce have failed to earn majority support from other workers who denounce the unionized workers’ politicized approaches at a time when the company is grappling with plunging profit due to the protracted chip slowdown.

LABOR UNION DEMANDS DON’T RESONATE WITH CO-WORKERS

The biggest Samsung union set a target to recruit 10,000 but its membership still falls short of that, with 9,803 members as of May 8 despite an aggressive campaign to encourage co-workers to join the union.

A labor union needs more than 50% of a company’s total employees as its members to apply collective bargaining rules to non-union members.

It added 76 new members in the latest week tallied, slower than previous weeks' additions, underscoring non-union workers’ growing resentment of the union's hardline stance.

Many Samsung Electronics employees show no empathy toward the union, criticizing them for being too political.

WORST QUARTERLY RESULTS SINCE 2009

In particular, many employees strongly condemn the union’s move to call for a global boycott of Samsung Electronics’ products, citing the company’s poor performance.

Samsung Electronics' operating profit in the first quarter ending March this year plummeted 95.5% on-year to 640 billion won ($483 million) on dwindling demand for its mainstay products from memory chips to smartphones and TVs.

That was its worst quarterly operating result since the first quarter of 2009 in the aftermath of the global financial meltdown.

The world’s largest memory chip maker also posted a record loss of 4.58 trillion won from its Device Solutions division, which oversees its chip business, in the quarter. It was the unit’s first shortfall in 14 years.

But the worst could be yet to come. Some market analysts forecast the company will report an operating loss in the second quarter.

Global technology industry tracker Omdia and Counterpoint Research projected that the global memory chip market and TV market would contract by 35.3% and 5.2%, respectively, this year from the previous year.

As other Samsung affiliates’ unions have agreed on a 4.1% wage rise, including the union of Samsung Display Co., which posted better earnings than those of Samsung Electronics, the electronics giant’s hardline union could lose more ground.  

Write to Jeong-Soo Hwang at hjs@hankyung.com

Sookyung Seo edited this article.