Samsung's $20 billion problem even has Korea's industry minister worried

Some 40,000 unionized workers at Samsung Electronics recently went on strike over demands for a 15% performance bonus based on the company's recent record high profits.

As negotiations stall and the union plans to go on a total strike from next month, a move which some estimate could cost Samsung $20 billion, South Korea's industry minister has understandably become concerned.

Thousands of employees went on strike during the overnight shift at Samsung's semiconductor complex in Pyeongtaek last week. The union said this caused foundry and memory chip production to decline by 58% and 18% respectively during the overnight shift strike last Thursday.

Samsung Electronics management hasn't accepted the workers' demand for a 15% performance bonus as yet. The union has now said it plans to go on a total strike from May 21 through June 27. Some academics believe that the production value lost to the strike could cost Samsung as much as $20 billion.

South Korea's Industry Minister Kim Jung-kwan is right to be concerned. During a briefing with reporters, he said that Samsung Electronics' recent record breaking profits belong not just to the management and workers but the entire Korean society.

He linked the company's achievements to “countless infrastructures, numerous partner companies, over 4 million small shareholders, and the National Pension Service.”

Kim added as the minister in charge of semiconductors, he can't imagine a strike in such a critical situation, where once competitiveness in semiconductors declines, it takes a long time to recover and most often companies fail to recover entirely.

He added that this intention was not to influence the negotiations between the management and labor union at Samsung Electronics, rather, he requested both sides to come to a mature decision for the benefit of both current and future generations.