Korean government jumps in on Samsung talks to avoid a union strike

The workers' union at Samsung Electronics isn't backing down. They're fully prepared to proceed with a complete strike starting tomorrow if the management doesn't meet their demands.

Talks reportedly broke down between the management and the union earlier today. As the strike would prove to be very costly for South Korea as well, the government has now lent its good offices to mediate the next round of talks between the two parties.

According to a new report out of South Korea, talks between Samsung Electronics management and the union will resume later today at the Gyeonggi Employment and Labor Office. South Korea's Minister of Labor Kim Young-hoon will mediate the negotiations.

The union remains firm in its demands. It wants Samsung Electronics to allocate 15% of its annual operating profit for employee bonuses and remove the bonus cap entirely, which is currently at 50% of annual salary.

If the demands are not met, more than 40,000 workers will go on a general strike. This would significantly hit semiconductor production during a time when the industry can't absorb such major disruptions.

By some estimates, the strike would cost Samsung over $20 billion while the overall loss to the Korean economy may exceed $60 billion. No wonder, then, that the government is trying to make all efforts to avoid a strike, as the ramifications of this move would have implications that are not only local, but truly global.