Samsung affiliate labor unions tie up amid dim outlook

Samsung Group affiliates’ unionized workers on Monday launched a joint organization to improve their bargaining power in terms of wages and welfare at a time when South Korea's leading conglomerate is struggling to improve profitability amid tough business conditions such as intensifying competition.

Unionized workers of Samsung Electronics Co.'s DX division, which oversees its mobile business, Samsung Display Co., Samsung Fire & Marine Insurance Co. and Samsung Biologics Co. formed the Samsung Group United Union (SGUU) representing some 15,800 employees. A labor union at Samsung Electro-Mechanics with about 2,100 members plans to join the body in May.

With the latter's participation, the joint body is expected to be larger than the National Samsung Electronics Labor Union (SELU), the group’s largest trade union with some 17,000 workers. Unionized workers at Samsung Electronics’ DX division, which launched a separate union at the world’s second-largest smartphone maker due to conflicts with the SELU last year, have yet to secure bargaining rights as they did not have enough members to gain rights to negotiate with the company.

The integrated organization demands the group abolish its wage guidelines and keep its business support task force from involving itself in industrial relations.

“We aim to establish wages, welfare and working conditions suitable for each affiliate’s conditions through flexible collective bargaining based on an equal relationship,” said Hong Gwang-heum, the SGUU’s head, who also leads the unionized workers of Samsung Fire & Marine Insurance.

UNREALISTIC DEMANDS?

The requests may be unrealistic as companies have different wage systems based on employees’ performances and evaluation criteria differ from industry to industry, experts said.

The SGUU may face difficulty in reaching agreements on various issues as it will be working for different industries, they added.

Samsung Group has become increasingly wary of the growing power of trade unions as it could lead to labor unrest.

Last week, an affiliation of unionized workers of the group’s 11 units such as Samsung SDI Co., the world’s No. 7 electric vehicle battery maker, demanded a 5.4% hike in wages and other measures for this year.

The group has been struggling to catch up to its bigger rivals. In some segments, which the company identifies as its growth drivers, Samsung has been overtaken by its competitors.

Samsung Electronics is the world’s top memory chipmaker but the gap with its followers has narrowed considerably. Its DRAM market share was 38.9% at the end of 2023, followed by SK Hynix Inc., the runner-up, which controlled 34.3% of the market, according to industry tracker TrendForce.

Samsung Electronics suffered an operating loss of 15 trillion won ($11.2 billion) from its semiconductor business last year.

Write to Chae-Yeon Kim and Yong-Hee Kwak at why29@hankyung.com
 

Jongwoo Cheon edited this article.