Overcoming COVID-19 Labor Negotiations... Tension Mounts at Renault Samsung and Korea GM

[Asia Economy Reporter Kiho Sung] Renault Samsung Motors and Korea GM are facing the challenging issue of wage negotiations following the COVID-19 pandemic. Both companies failed to reach an agreement on last year's wage negotiations and are now preparing for additional talks, complicated further by the difficult issue of workforce adjustments. Due to this, there are concerns that prolonged negotiations could disrupt operations.

The Korea GM labor union will hold a regular delegates' meeting on the 18th to elect negotiation representatives. Korea GM management and labor failed to reach a conclusion in last year's wage talks, and with the inauguration of a new union executive team, negotiations have been postponed to this year.

A Korea GM union official stated, "We will elect negotiation representatives through today's (18th) regular delegates' meeting," adding, "Once the negotiation team is formed, we plan to send an official letter to management to resume wage negotiations." Accordingly, Korea GM's wage talks are expected to resume in March.

Last month, Korea GM's union chairman Kim Seong-gap attended the Trailblazer launch event, showing a sign of labor-management harmony. However, it is uncertain whether negotiations will proceed smoothly, as Korea GM announced plans to close the Changwon and Jeju parts logistics centers, which the union strongly opposes.

A Korea GM union official said, "(The closure of parts logistics centers) is a very important issue," and added, "We plan to inform management of our intention to hold a special labor-management council." Even if this wage negotiation proceeds smoothly, the annual wage and collective bargaining negotiations must follow soon, which could reignite conflicts during the process.

Renault Samsung Motors is in a more urgent situation. From the 4th to the 7th, labor and management held intensive negotiations over last year's wage talks but failed to reach a conclusion. Since then, they have been conducting behind-the-scenes contacts to arrange further talks but have yet to set a schedule.

A Renault Samsung Motors official explained, "Negotiations were suspended as the Busan plant was closed from the 11th to the 14th last week." A union official at Renault Samsung said, "There was coordination between secretaries regarding the negotiation schedule on the 17th," adding, "We do not know when negotiations will resume."

A variable in Renault Samsung's labor-management talks is the newly released XM3. Jose Vicente de los Mozos, Renault Group Vice Chairman in charge of manufacturing and supply, who visited Korea last month, stated, "Renault Samsung must resolve labor-management conflicts to secure European export volumes." The survival of Renault Samsung depends on the allocation of XM3 production volumes. The consignment contract for the Nissan Rogue ends in March, and exports of the Rogue sharply declined by 83.1% year-on-year to 1,230 units in January.

The variable is the 'New Start Program,' part of the voluntary retirement announced by management on the 5th. The union strongly opposes the company's voluntary retirement plan. A union official said, "The unilateral announcement of voluntary retirement by management during negotiations is incomprehensible," and stated they will respond accordingly.

Management maintains that they will continue dialogue with the union and proceed with the scheduled domestic launch of the XM3. A Renault Samsung Motors official said, "We plan to launch the XM3 next month," adding, "Specific schedules are under internal discussion."

This content was produced with the assistance of AI translation services.