Samsung Biologics faces first-ever strike; negotiations resume amid deadlock

Samsung Biologics, a cornerstone of South Korea's burgeoning biopharmaceutical industry, is currently facing an unprecedented situation: its first-ever full-scale strike since its establishment. The industrial action, now entering its third day, has halted operations and brought production to a standstill, raising concerns about supply chain disruptions and financial losses.

The core of the dispute lies in disagreements over wage increases and the calculation of performance-based bonuses. The union is demanding an average wage hike of 14%, a one-time bonus of 30 million won per employee, and the distribution of 20% of operating profits as bonuses. In contrast, the company has proposed a 6.2% wage increase and performance bonuses within 10% of operating profits, citing financial sustainability and the need to secure funds for future growth.

Beyond financial terms, the union also seeks pre-approval for key management decisions, including hiring, performance evaluations, and mergers and acquisitions. The company has rejected these demands, viewing them as an infringement on its operational autonomy. This deadlock highlights a fundamental conflict between labor's desire for greater participation and management's prerogative.

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The company is experiencing production disruptions due to the partial strike in the material handling department since the 28th of last month, leading to a halt in the supply of raw and subsidiary materials and the suspension of some product manufacturing.

The strike, which involves around 2,800 of the company's 5,455 employees, is being conducted through employees taking annual leave and refusing holiday work. However, the company argues that even short interruptions in the continuous 24-hour production process required for biopharmaceuticals can lead to significant setbacks. Partial strikes in material handling departments since late April have already halted the production of some products, with the company estimating losses at approximately 150 billion won.

Both parties are scheduled to reconvene for negotiations on the fourth day, with the Ministry of Employment and Labor mediating. While Samsung Biologics has expressed its intention to participate sincerely in the upcoming talks, the wide gap between their positions suggests that reaching an agreement will be a challenging task. This situation is being closely watched, as it represents a significant labor relations event for a major player in the global biopharmaceutical market.

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We will faithfully participate in the negotiations scheduled for the 4th.