In Samsung's town in Vietnam, workers confident of riding out Note 7 storm

Fri Oct 14, 2016 1:07pm EDT
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By Mai Nguyen

THAI NGUYEN, Vietnam (Reuters) - As Samsung Electronics (005930.KS: Quote) struggles to salvage its reputation after the safety problems that have beset its flagship Galaxy Note 7 smartphone, the South Korean company can at least bank on an army of Vietnamese workers for support.

Tens of thousands of them are involved in assembling more than a third of Samsung's smartphones - the Galaxy Note 7 included - in the Pho Yen area of Thai Nguyen province, which is about 65 km north of the Vietnamese capital Hanoi. Samsung's arrival three years ago transformed it from a sleepy farming district into a sprawling industrial town.

While the company expects to take a profit hit of around $5 billion from the scrapping of the fire-prone phone, 13 workers interviewed by Reuters outside the factory almost all said they are confident their employer will pull through. They also say Samsung pays well, offers good benefits and takes care of their needs.

"Recalling (Note 7) doesn't mean we are unemployed or such; Samsung also makes many other phones and new models, not just the Note 7," said Nguyen Thi Hang, one of some 110,000 Vietnamese who work for Samsung Electronics across Vietnam, making it one of the nation's biggest employers.

The Samsung factory workers get around $180 in monthly base salary, which can grow to around $300 when overtime, annual incentives and other benefits are included. That is well above average incomes in such rural areas.

Young workers are also drawn to the Thai Nguyen jobs by generous benefits, including subsidized or free meals, and accommodation that cost less than $3 a month. There are also organized sports, karaoke and discounts on various products and services, such as Samsung phones and hair salons.

Nguyen Van Doai, 27, a worker at the plant, said some overtime options had been reduced due to the Note 7 withdrawal, but there was no indication of job cuts.

"Samsung hasn't reached a level where they have to cut jobs because they are still hiring many people and constructing more buildings," Doai said.   Continued...

An advertisement of Samsung Galaxy Note 7 is seen at a mobile phone shop in Hanoi, Vietnam October 12, 2016. REUTERS/Kham