Labor Negotiations Start Amid COVID Crisis in Auto Industry... Korea GM and Renault Samsung 'Unstable'

Korea GM and Renault Samsung Unions Finalize Demand for Basic Wage Increase This Year

Korea GM Bupyeong Plant (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] The domestic completed car industry, struggling due to the impact of the novel coronavirus infection (COVID-19), is trembling with anxiety ahead of this year's wage and collective bargaining negotiations. This comes as the labor unions of Korea GM and Renault Samsung Motors have presented demands centered on basic wage increases and performance bonus payments.

According to the industry on the 20th, the Korea GM union held an extraordinary delegate meeting on the 18th and finalized the 2020 wage and collective bargaining demands. The proposal includes a demand for a basic wage increase of 120,304 KRW per month and a performance bonus payment of 400% of the ordinary wage plus an additional 6 million KRW. The 400% of the ordinary wage amounts to about 16 million KRW, making the total performance bonus demand approximately 22 million KRW per person.

This surpasses last year's demands, which included a basic wage increase of 123,526 KRW and a performance bonus payment of 250% of the ordinary wage plus 6.5 million KRW. The union also plans to demand a 500% increase in the TC allowance paid to assembly line workers and an expansion of the scope of production incentive payments.

The Renault Samsung union, which finalized its wage and collective bargaining demands earlier, is also pushing for a basic wage increase of 71,687 KRW per month and a lump-sum payment of 7 million KRW under the name of overcoming COVID-19 and encouraging the launch of the XM3. They also plan to demand integration of the wage system by job category and additional staffing through the collective agreement. It is reported that the current executive team, whose term expires at the end of this year, is determined to secure a basic wage increase this time.

Accordingly, the industry expects that completed car manufacturers will face a difficult wage and collective bargaining season again this year. As the global automobile market crisis deepens due to COVID-19, it is analyzed that management will find it difficult to accept the union's demands. In fact, Renault Samsung is currently considering closing some of its 12 directly operated service centers to improve finances, and Korea GM is contemplating selling land near the Bupyeong plant's Logistics Optimization Center (LOC).

An industry official said, "Last year, some completed car manufacturers suffered difficulties due to the absence of new cars, and the unions' struggles caused headaches. This year, most domestic completed car manufacturers are facing more difficult management conditions than last year, and global parent companies are also likely to pursue austerity management, so negotiations between labor and management are expected to be challenging."

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