Economy News

Samsung reaches an 11th-hour wage deal, averting an 18-day strike by 48,000 workers

Samsung Electronics and its union reached a tentative agreement late on Wednesday 20 May, suspending a strike planned for 21 May to 7 June. In a statement reported by Bloomberg, the company said “labor and management have reached a tentative agreement on wages and the collective bargaining agreement”. Samsung shares rose as much as 7.6% in Seoul, and the Kospi gained more than 6%.

The dispute was over bonuses. Khaleej Times, carrying Reuters a day earlier, reported that the union of about 48,000 workers wanted the bonus cap of 50% of annual salaries abolished, 15% of annual operating profit set aside for bonuses, and the changes made permanent. Samsung had called the demands “unacceptable”, and its shares fell about 3% when talks collapsed. Samsung accounts for almost a quarter of South Korea's exports.

“We express deep regret and feel disappointed but the union plans to go ahead with the strike according to the law” — Choi Seung-ho, union leader, before the deal, via Khaleej Times

How each outlet framed it

• Bloomberg — a “potentially crippling strike” averted at the last minute, and the market's relief.
• Khaleej Times (Reuters) — the bargaining details, with labour commissioner Park Soo-keun saying the government was open to restarting mediation “anytime”.
• TaiwanPlus — the risk to South Korea's economy and the global semiconductor supply chain, and a ratification vote still to come.

What we don't know yet: the deal's terms. None of the three outlets gave pay or bonus figures, and the agreement still has to be put to a vote of union members.