Samsung Biologics union announces three-week general strike, putting global CDMO credibility to the test

The Samsung Biologics labor union has declared that it will launch a large-scale second general strike lasting three weeks from late this month after post-mediation talks with the company broke down.

The Samsung Biologics Win-Win Labor Union said in a strike directive on the 4th that it would hold a second general strike for three weeks starting Oct. 26. The union stepped up its work-to-rule campaign on the 2nd ahead of the full-scale strike.

The measures include observing required monthly working hours, refusing discretionary overtime and holiday work, and not responding to work-related messages after leaving work, as well as mechanically applying standard operating procedures and good manufacturing practice. The union also instructed members not to rush to finish the day's work and to follow approval procedures as prescribed.

The company expressed serious concern and appealed for a resolution through dialogue. It stressed that, given the special nature of biopharmaceutical production processes, a three-week strike would inevitably cause damage that would be difficult to absorb if it goes ahead.

During the first full-scale strike, held May 1-5, production disruptions affected 23 batches, with losses estimated at about 150 billion won. The company says the second strike would last much longer and could deal a devastating blow to its long-term competitiveness and external credibility.

The strike announcement followed repeated breakdowns in negotiations over the 2026 wage and collective bargaining agreement, which began with an initial meeting last December and continued for more than 10 months. After the Incheon Regional Labor Relations Commission halted labor-dispute mediation in March, the union staged a partial strike in April and a full-scale strike in May.

The union and company held three rounds of post-mediation talks with the commission from early September through Oct. 1 but failed to reach an agreement. The mediators reportedly concluded that, given the wide gap between the two sides, there was little benefit in scheduling additional mediation sessions.

The most contentious issues are the size of the base-pay increase and the criteria for calculating bonuses. The union is seeking a 9.5% wage increase, combining base and performance-based increases, as well as a lump-sum payment of 3 million won. It argues that a fixed-pay increase of about 15% is needed when actual compensation by job grade is taken into account.

The union has also called for 15% of operating profit to be transparently allocated to a bonus pool. It says compensation gaps are clear when wages by job grade are compared with those of competitors in the same industry, and argues that the company's claim of high pay based solely on average compensation figures disclosed in regulatory filings is misleading.

The company, meanwhile, has maintained that the total 6.2% wage increase it proposed this year represents the highest level of compensation in South Korea's pharmaceutical and biotech industries. It has ruled out accepting a double-digit fixed-pay increase or mandatory allocation of a set share of operating profit.

In the third round of post-mediation talks, the company proposed a financial support package for the employee stock ownership association totaling 30 billion won, offering one year of interest support capped at 100 million won per employee, and a revised proposal expanding the collective bargaining agreement to 74 provisions. The union rejected the proposals, saying they were unrelated to its core demand for improvements to the compensation system.

Industry experts in pharmaceuticals and biotech see the labor dispute as a potential turning point that could undermine South Korea's structural position in the global contract development and manufacturing organization (CDMO) market. Biopharmaceutical CDMO operations involve cell culture and purification processes that require continuity, sterility and precision.

It typically takes at least 50 to 60 days to produce a batch, or a single lot of a drug. If a staffing gap disrupts precise control of conditions such as temperature, oxygen saturation or agitation speed during a critical process such as cell culture or purification, proteins or antibodies can be compromised, requiring the entire batch to be discarded.

Disposal costs are enormous, but failure to meet prescheduled delivery dates could also lead to claims for late-delivery penalties under long-term supply contracts with global pharmaceutical companies. With the effects of the first strike set to be reflected in second-half results, a three-week strike could have a prolonged impact on next year's results and cash flow overall.

The loss of external credibility is also a serious concern. The decisive reason multinational pharmaceutical companies entrust external CDMO firms with producing critical biopharmaceuticals that are vital to human life is their confidence that products will be delivered on schedule and with consistent quality.

In the global CDMO market, Switzerland's Lonza and Japan's Fujifilm Diosynth are aggressively expanding production capacity. The redistribution of orders is also moving quickly as multinational pharmaceutical companies seek alternatives to China's WuXi Biologics amid efforts to advance the U.S. BIOSECURE Act.

Amid these contracting opportunities, repeated concerns about the risk of production stoppages due to strikes could make global pharmaceutical giants reluctant to select Samsung Biologics as a sole supplier, prompting them to diversify orders or shift them to competitors. Customers are also reportedly raising questions at overseas business-development meetings about supply continuity amid labor disputes.

Samsung Biologics, which is ramping up operations at its Songdo Plant 5 and expanding its global footprint, including its Rockville, Maryland, facility, is at a critical point in securing customer confidence. Some analysts also warn that prolonged internal fatigue and conflict could lead to a “slow-burn” effect, causing subtle cracks in process quality control.

About three weeks remain until the planned strike date of Oct. 26. The company has said it is considering legal action while keeping communication channels open, making the possibility of a last-minute deal through behind-the-scenes negotiations the key question.

However, the union has maintained that it will not back down without a more substantive revised proposal on wages and personnel policies, and has already intensified its work-to-rule campaign, suggesting negotiations will face significant difficulties. If the two sides cannot resolve the crisis in a spirit of cooperation, the brand value and global credibility built on the world's largest biopharmaceutical production capacity could suffer lasting damage.