Operations at Samsung Electronics' plant in southern India were disrupted for a second consecutive day on Tuesday as hundreds of employees went on strike demanding higher wages, with top executives seeking to resolve a rare instance of labor unrest for the South Korean technology giant.
India's biggest consumer electronics company, Samsung counts the South Asian nation as a key growth market, where it competes with the likes of LG Electronics, turning out everything from televisions and refrigerators to smartphones.
The strike-hit plant, the smaller of Samsung's two Indian factories, employs around 1,800 people and makes electronic products rather than the company's better-known smartphones.
But it still contributes 20% to 30% of the company's annual revenue of $12 billion in India, said two sources with direct knowledge of the matter, speaking on condition of anonymity.
Posters with the words "Indefinite Strike" went up outside the factory in Sriperumbudur near the city of Chennai, where hundreds of workers in company uniforms set up tents to shade themselves from the heat.
Union leader E. Muthukumar told Reuters that the strike "will continue for a third day" on Wednesday.
About half of the factory's daily production was affected when many workers stayed away on Monday, and the protesters continued to press their demand for higher wages and better hours and, most importantly, wanted Samsung to recognize the formation of a union backed by the Centre of Indian Trade Unions group.
Shares of Samsung Electronics in Seoul closed down 1.9%, versus benchmark KOSPI's 0.5% fall.
Samsung's Southwest Asia CEO, JB Park, and other senior executives were visiting the factory on Tuesday to find a resolution, people with direct knowledge of the situation said. Park oversees the Indian market for Samsung from Gurugram, near New Delhi.
Samsung did not respond to a request for comment. Muthukumar said no settlement had been reached during the discussions on Tuesday with Samsung management.
Tamil Nadu labor secretary Veera Raghava Rao said that negotiations between workers and management are ongoing, but there is no indication yet when the matter will be resolved.
A spokesperson for Samsung India said on Monday that it actively engaged with workers "to address any grievances they may have and comply with all laws and regulations."
Around 800 workers signed a register kept outside the factory to record their protest.
The strike comes ahead of India's festive season when consumers buy gifts or items for personal use, lured by discounts offered by manufacturers.
"A strike at this point puts a spanner in Samsung’s production ramp-up ahead of the all-important festive season sales beginning October," said Prabhu Ram, a vice president at Cybermedia Research.
In South Korea, the 36,500 members of Samsung Electronics' biggest worker union, who have been demanding higher wages and benefits, held a strike for several days in July and August.
In late July, however, the company said the action did not disrupt production there.
In India, its workers are demanding equal remuneration for those with the same length of experience, according to at least half a dozen employees who spoke on condition of anonymity.
"If they (Samsung) had given us a living wage and treated us with respect, we wouldn't have thought of joining a union," said one worker outside the factory who declined to be named, fearing reprisal from the company.
Their concerns were backed by some Indian political leaders who attended Tuesday's protest.
One poster outside the factory exhorted state labor officials not to support the management, advising instead: "Discuss and solve demands from the labor union with union officials."