Korea GM and Renault Samsung Overcome Labor Negotiation Hurdle, 'All In' on Business Normalization

[Asia Economy Reporter Suyeon Woo] Korea GM and Renault Samsung Motors have concluded last year's wage negotiations after more than a year and are accelerating efforts to normalize management. They plan to resolve the long-standing labor-management conflicts and now launch an all-out campaign to boost domestic new car sales and attract exports.

According to the automotive industry on the 15th, on the 14th, the tentative agreement on the 2019 wage negotiations of Korea GM and Renault Samsung was approved by a majority vote. Korea GM had repeated strikes and negotiations for over 10 months, and Renault Samsung for more than 7 months, continuing labor-management confrontations.

This negotiation settlement appears to reflect the global automotive market crisis caused by the novel coronavirus disease (COVID-19). As the automotive industry enters a crisis phase, a consensus was formed between labor and management on the need for rapid management normalization.

The tentative agreement on Korea GM's 2019 wage negotiations recorded a 53.4% approval rate in the union members' vote. The agreement mainly includes a wage freeze and no performance bonuses in line with the 2018 wage and collective bargaining agreement framework, with an additional vehicle incentive program for union members.

In the case of Renault Samsung, the tentative agreement received a high approval rate of 70.2% in the vote. The agreement centers on freezing the base salary while providing a total one-time compensation of 8.88 million KRW, including a 2 million KRW compensation incentive. A contribution allowance paying 5% of the monthly bonus base amount was also newly established.

Korea GM Chevrolet Trailblazer

Korea GM and Renault Samsung have experienced prolonged labor-management conflicts over last year's wage negotiations. Frequent strikes caused production disruptions and difficulties in attracting new car models. Now, only expanding sales using new cars that have received positive responses in the domestic market and focusing all efforts on exports remain.

Korea GM's Trailblazer, launched in January, sold 3,795 units domestically by March this year, emerging as Korea GM's main model. The Bupyeong plant is responsible for producing the Trailblazer (including the Encore GX), surpassing 40,000 cumulative exports, which helped Korea GM's RV export volume recover to about 20,000 units per month.

Renault Samsung XM3

Renault Samsung's new model XM3 surpassed 20,000 cumulative contracts within a month of its domestic launch. The XM3 showed signs of success by exceeding 5,000 pre-orders alone, becoming a popular compact sport utility vehicle (SUV).

Renault Samsung is now focusing on securing production for XM3 export volumes and accelerating management normalization. The contract for export consignment volumes of Nissan Rogue, which accounted for more than half of Renault Samsung's Busan plant production, ended at the end of last year, and remaining volumes have been produced until March this year.

From April, a new model to replace the Nissan Rogue is urgently needed. Renault headquarters has stated that it will not allocate new car volumes unless Renault Samsung's labor-management conflicts are resolved. However, to attract new car models, not only the 2019 negotiations but also the 2020 negotiation process must be passed stably without strikes.

An industry official said, "It seems that labor and management have found a consensus that cooperation is necessary to overcome difficulties during the COVID-19 situation," adding, "However, now that last year's negotiations are over, labor and management must show unity in this year's negotiations to overcome the crisis."

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