Aiming for a rebound with new cars... but union risks hold back progress

[Asia Economy Reporter Kiho Sung] Korean GM and Renault Samsung Motors, which are aiming for a rebound with new cars launched earlier this year, are still unable to escape the 'union risk.' With the domestic automobile market sales in February hitting the lowest in 11 years due to the impact of the novel coronavirus infection (COVID-19), the addition of labor disputes could put them in a survival crisis.

According to the automobile industry on the 5th, the Korean GM labor and management will resume the 2019 wage negotiations, which were suspended last year, starting today. It has been about five months since Korean GM labor and management resumed negotiations after the union declared a halt to talks on October 10 last year. The meeting on this day will be held as a meet-and-greet with the newly formed negotiation team, and negotiations are expected to intensify from the next meeting. The Korean GM union executive plans to continue negotiations focusing on the discount benefit proposal, withdrawal of lawsuits and complaints against union members, and solutions to the irregular workers' issues, which were discussed but suspended last year.

For now, Korean GM's situation is not too bad. Labor and management are emphasizing harmony, jointly wishing for the success of the Trailblazer, which was launched earlier this year. Kim Seong-gap, chairman of the Korean GM union, emphasized at the Trailblazer new car launch event that "Korean GM labor and management are a community of shared destiny."

However, there is still some unease. The union is fiercely opposing the company's recent decision to close regional parts centers and business offices. On the 26th of last month, the Korean GM union filed a complaint against company executives with the Northern Branch of the Central Regional Employment and Labor Office for violating the Labor Union and Labor Relations Adjustment Act.

The situation at Renault Samsung Motors, which is set to officially launch the XM3 on the 9th, is even more complicated. The Renault Samsung Motors union is reportedly considering a full strike timed with the XM3 launch date on the 9th to maximize the impact of their struggle.

On the 3rd, Renault Samsung Motors labor and management held the 15th round of negotiations to prevent the worst-case scenario but reportedly ended up at an impasse without any significant conclusions. The two sides still maintain their positions regarding the basic wage increase. Additionally, the union has demanded compensation for wage losses due to the strike in December last year, while the company insists on the 'no work, no pay' principle, making negotiations even more complicated. The Renault Samsung Motors union will hold an internal meeting on the 6th to reconsider the direction of future negotiations and whether to strike.

On the other hand, some unions have chosen coexistence considering the company's difficulties due to COVID-19. The Hyundai Motor union decided to temporarily suspend the delegate and business unit representative elections scheduled for the 3rd. Lee Sang-soo, the moderate and pragmatic branch chief of the Hyundai Motor union, first expressed the opinion to focus on preventing the spread of COVID-19, which was reportedly agreed upon by union officials. Furthermore, the Hyundai Motor union, together with management, is planning events such as blood donation campaigns, mask support for vulnerable areas, and support for parts suppliers to overcome the community crisis.

An industry insider pointed out, "The initial contract for a new car accounts for most of the annual volume, so the early atmosphere is crucial," adding, "If labor disputes occur at such a time, it could lead to mutual destruction of both the company and the union."

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