Samsung’s Labor Crisis: How Lee Jae-Yong’s Apology Could Change the Game for Employees and Investors

[Anchor] Lee Jae-yong, chairman of Samsung Electronics, issued a public apology to the nation as the company faced its second-ever planned general strike. This is the first time he has bowed publicly since becoming chairman. We’ll connect with our reporter for details. Yang Hyun-joo! [Reporter] Yes. With the threat of a union-led general strike at Samsung Electronics escalating, Lee Jae-yong publicly bowed and apologized in person. Returning from a business trip to Japan on May 16, he told reporters, “I will take the brunt of the storm and accept full responsibility,” and offered an immediate public apology. He bowed and said he sincerely apologizes to customers and the public for the concern caused by internal company issues. Addressing the union, he said, “We are one body and one family,” urging dialogue and unity and saying that now is the time to come together and move in the same direction. This is the third time Lee has apologized publicly to the nation — previously during the MERS outbreak in June 2015 and over management succession and labor issues in May 2020. Those earlier apologies came when he was vice chairman; this is his first public apology since he became chairman in October 2022. As the situation intensified, the government stepped in to mediate. Kim Young-hoon, minister of employment and labor, met with Samsung executives for about an hour on May 16 and outlined the government’s position and the outcome of yesterday’s (May 15) meeting with the union. [Anchor] So the chairman’s statement and government mediation prompted labor and management to reopen dialogue? [Reporter] Yes. Choi Seung-ho, head of the Samsung Group cross-company union, said the sides agreed to resume post-mediation talks at about 10 a.m. on May 18 at the Central Labor Relations Commission in Sejong City. The commission’s chair will attend the main negotiations in person to mediate. Earlier, management acceded to the union’s demand and replaced its chief bargaining representative, swapping Vice President Kim Hyung-ro for Yeo Myung-gu, the People Team leader and the top HR official for the semiconductor division. The union agreed to resume talks on the condition that Vice President Kim attend as a non-speaking observer to help maintain continuity. The union also held a preliminary meeting this afternoon with the new team leader, Yeo Myung-gu. Yeo reportedly apologized for the breakdown in trust between labor and management and said he would engage in future negotiations in good faith. However, the risk of a strike remains if the main talks fail to reach an agreement. The union is demanding an institutionalized system that would pay 15% of operating profit as uncapped performance bonuses, while management insists on maintaining the existing system and offering uncapped special awards as a more flexible compensation approach. The union says that unless management presents a substantive proposal, it will move forward with a planned 18-day general strike from May 21 through June 7, potentially involving up to 50,000 participants. This report comes from the Economy Desk. For Yonhap News TV inquiries and tips: KakaoTalk/LINE jebo23. Yang Hyun-joo (yang@yna.co.kr)