Renault Samsung Labor-Management Negotiations Ultimately Extend Beyond the Year

Company Sends Official Letter to Resume Main Negotiations Early Next Month
Union to Hold Strike Vote Starting the 8th

[Asia Economy Reporter Kiho Sung] Renault Samsung Motors, the only domestic automaker that has not completed this year's wage and collective bargaining agreement negotiations (wage and collective bargaining), will continue negotiations into the new year. The labor union plans to push ahead with a member vote to obtain the right to strike in line with the resumption of negotiations, heightening concerns over a management crisis due to prolonged labor-management conflicts.

According to industry sources on the 24th, Renault Samsung recently sent an official letter to the union proposing to resume main negotiations in early January next year. Renault Samsung also conveyed to the union that it is preparing a management proposal.

The union is tightening its struggle in line with the resumption of negotiations. Following one-person protests during break times at Renault Samsung's Seoul headquarters, in front of Busan City Hall, and at various business sites, the union has decided to hold a strike authorization vote. A Renault Samsung union official stated, "We have decided to conduct a strike authorization vote over four days: the 8th and 9th, and the 11th and 12th of next month." The union recently applied for a strike mediation at the Central Labor Relations Commission and received a decision to suspend mediation. Once the member vote is completed, a strike can be initiated.

Renault Samsung labor and management began wage and collective bargaining negotiations in July with an introductory meeting, but have been deadlocked for three months since the collapse of the 6th practical negotiation on September 6. During this period, the union has shown a tough stance by attempting to join the Metal Workers' Union and obtaining a suspension decision on strike mediation from the Central Labor Relations Commission.

Moreover, the re-election of Park Jong-gyu, classified as a hardliner, as union chairman last month has led to difficulties in negotiations. In this year's wage and collective bargaining negotiations, the union has demanded a basic wage increase of 71,687 KRW (4.69%), a lump-sum payment of 7 million KRW, a contribution of 1.2 billion KRW to the union development fund, and increases in vacation pay and performance bonuses. On the other hand, management argues that due to repeated shutdowns since September caused by decreased exports, it is difficult to raise basic wages or provide excessive lump-sum payments.

Renault Samsung had hoped for a turnaround by securing XM3 export volumes from its European headquarters, but the prolonged labor-management conflict now makes this uncertain. Renault Samsung has produced more than 100,000 units annually of the Nissan Rogue, but the contract ended in March this year, leading to a cliff in order volume. Although it secured XM3 export volumes to Europe in September, the actual export quantity remains uncertain. The union plans to strike in February next year, when export volumes are expected to increase due to XM3 exports, if the current situation continues. Meanwhile, Dominique Signora, CEO of Renault Samsung Motors, emphasized at a press conference last month that "maintaining good labor-management relations is key to securing export volumes."

Meanwhile, Renault Samsung labor and management have continued conflicts by carrying over wage and collective bargaining negotiations into the new year annually. The 2019 negotiations were finally concluded in April this year, eight months after the introductory meeting in September last year. The 2018 negotiations were also finalized last June, a year after the introductory meeting in June of that year.

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