South Korea is preparing to use every possible measure to prevent a strike at Samsung Electronics, the country’s largest employer and amongst the world’s biggest memory chip makers. The government has warned that even a single day of halted production at Samsung’s semiconductor plants could cause direct losses of about 1 trillion won ($667 million). Longer disruptions could be far more damaging, with estimates suggesting losses of up to 100 trillion won if materials are wasted.
Samsung and its labour union are scheduled to resume pay negotiations with a government mediator, raising hopes of easing tensions. The talks come at a critical time, as the company accounts for 22.8 per cent of South Korea’s exports and 26 per cent of the domestic stock market. It employs more than 1,20,000 people and works with around 1,700 suppliers, making any disruption a major risk to the national economy.
One option under consideration is emergency arbitration. This measure, which can be invoked by the labour minister if a dispute is seen as harmful to the economy or daily life, immediately halts industrial action for 30 days while the National Labour Relations Commission mediates. It has rarely been used and would represent an extraordinary step for a government that has generally supported unions.
The union has said it will negotiate in good faith to reach an agreement with management. For now, the government is focused on minimising risks and ensuring that one of South Korea’s most critical industries continues to operate without interruption.