7-Month Labor Dispute Ends... Renault Samsung Finalizes 2019 Wage Negotiations

Provisional Agreement Approved with 70.2% in Favor... Expectation for Boosted New Car Production

[Image source=Yonhap News]

[Asia Economy Reporter Kim Ji-hee] Renault Samsung Motors has finalized the 2019 wage negotiations that extended into the new year. It took about seven months since the start of the talks.

According to Renault Samsung on the 14th, a provisional agreement was approved with 70.2% of union members voting in favor during a two-day vote held from the previous day.

The approved agreement mainly includes freezing the base salary while providing a total one-time compensation of 8.88 million KRW, including a 2 million KRW compensation incentive and 2.58 million KRW already paid as part of the Profit Sharing System (PS). A new contribution allowance was also introduced, paying 5% of the monthly bonus base amount. Additionally, both labor and management agreed to establish a joint social contribution fund to help local communities affected by COVID-19.

Since the initial meeting in September last year, Renault Samsung labor and management had been negotiating for over seven months on the 2019 wage agreement. The union demanded improvements in employee compensation and treatment, including a base salary increase, while management insisted on strengthening the competitiveness of the Busan plant to secure new export volumes, resulting in stalled negotiations.

However, the recent spread of the COVID-19 crisis appears to have led to a dramatic resolution. Both sides reportedly reached a consensus on the need to quickly secure future production volumes through boosting domestic sales and improving manufacturing competitiveness.

With the labor-management conflict that had hindered progress since last year now resolved, Renault Samsung can focus on new car production. The company is expected to actively compete to secure export volumes for the new XM3 model alongside ensuring its stable production.

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