Samsung Biologics, union to return to direct negotiations, but concerns grow of prolonged dispute

Though Samsung Biologics and its labor union, which previously failed to reach an agreement despite government mediation, have decided to return to direct negotiations, signs are emerging that the dispute could become prolonged as their legal battle intensifies, with the police investigating allegations that the union chair leaked trade secrets.

The union, management and government recently concluded their tripartite talks, after which the union delivered its revised wage negotiation proposal directly to the company. Samsung Biologics is reviewing the proposal and has until early next week to prepare a response.

However, negotiations are expected to remain difficult, as the two sides remain divided on issues such as wage increases and performance bonuses for employees, as well as management-related demands. Earlier this month, the union staged the first strike in the company’s history and is continuing a work-to-rule campaign by refusing to work overtime and on holidays.

Tensions between labor and management have also deepened. The Incheon Metropolitan Police Agency raided Samsung Biologics’ headquarters in Songdo on Tuesday to secure records related to system access and company entry logs from internal servers and document storage facilities.

The search was conducted to gather evidence after the company filed a complaint against union chair Park Jae-sung on charges of defamation and breach of duty. Samsung Biologics alleges that Park edited internal confidential business documents, including tax invoices from the company’s public relations department, and distributed them externally. Park and the union leadership deny the allegations.

Concerns about the company’s performance are growing as well. Analysts say labor-management tensions could negatively affect orders in the contract development and manufacturing organization business, for which long-term contracts and stable production capabilities are critical.

Samsung Securities lowered its forecast for Samsung Biologics’ operating profit this year by 12 percent, adding that the impact of labor disputes, including strikes, could begin affecting earnings from the third quarter.

Brokerages remain divided on the stock’s outlook. Daishin Securities lowered its target price for Samsung Biologics by 9.1 percent, from 2.2 million won ($1,465) to 2 million won, saying, “The strike issue could cause short-term production disruptions and earnings volatility.”

By contrast, KB Securities maintained its “buy” rating and set a target price of 1.9 million won because “there is a risk of union strikes in the short term, but if negotiations are concluded and uncertainty is resolved, it could instead become a catalyst for the stock price.”

Shares of Samsung Biologics closed at 1.373 million won on Thursday, down 0.79 percent from the previous session.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY KIM KYUNG-MI [yoon.soyeon@joongang.co.kr]