Samsung Techwin, a surveillance and aeronautics company, hurriedly changed its name into Hanwha Techwin at the general shareholders' meeting on Monday despite strong opposition and criticism from labor unions as well as its own employees.
Hanwha Group, South Korea's leading defense conglomerate, already paid some of the total acquisition payment of 830 billion won and it is set to acquire a 32.4 percent stake of Samsung Techwin.
Early in the morning on the day, around 600 members belonging to the labor union who are also minority shareholders went into an all-night sit-in demonstration. They tried to enter the meeting place from early in the morning but were blocked by police, according to local media outlets. Among them, around 140 employees, who had physical flights with police, were taken to the police station.
One employee and shareholder attending the meeting said, “I barely came into the meeting after around three-hour physical fights. I can’t understand why we – official shareholders having stocks – were blocked from getting inside.”
“There wasn’t any explanation or apology for the sales from the company so far. That was wrong in the first place,” he added.
The opposition to the sales is not only limited to the labor union. Most - if not all - of the Samsung Techwin employees were shocked to get the deal news from media outlets instead of their own management within the company.
One employee declining not to be identified said, “People outside Samsung probably may not understand why we are so mad at this situation as they are not familiar with Samsung culture. From the momemt we get into Samsung, we are constantly pressed to sacrifice for the company in the name of Samsung family."
“You never know how much we were shocked when we get the news from the media and not from the company - so-called family,” she said.
Despite the opposition and criticism, Samsung Techwin will officially be merged into Hanwha group and Samsung’s big deals of its four affiliates will officially come to an end.
Samsung Techwin' labor union revised up the request for compensation from 20 million won per employee to 40 million won but it was declined.
Since Samsung and Hanwha announced their surprise big deals last November, there has been strong opposition from Samsung Techwin’s employees who do not want to give up Samsung brand. On April 2, 88.9 percent of Samsung Techwin’s labor union approved of going on strike. Out of a total of 2,998 union members, 2,746 members voted and 2,665 voted yes. The labor union has opposed the selling since the announcement but as there was no tangible outcome, they requested a petition to the labor commission in March.
From Monday, Samsung Techwin and Samsung Thales are merged into Hanwha group and they will become Hanwha Techwin and Hanwha Thales. Hanwha will then become the nation’s largest defense company with 270 million won in sales. It already became the number one in the petro chemistry after buying Samsung Total and Samsung General Chemicals in April.
Through the merge, Hanwha’s sales in the defense industry went up to 270 million won from 100 million won level in 2013. Apart from the size, its business expanded from conventional ammunition and precise guided missile into self-propelled artillery, and engine and radar for aircraft and vessel.
Kim Cheol-kyo, Samsung Techwin’s chief, is set to remain in the office. He is expected to recover the company’s stability and to boost the harmony between Hanwha and Techwin, according to market watchers.
