Renault Samsung in Crisis... Strike Vote Amid Labor-Management Conflict

Renault Samsung Labor and Management, the Only Complete Vehicle Manufacturer Failing to Reach 2020 Wage Negotiation Agreement
Union Considers Strike Amid 'Survival Plan' Including Voluntary Retirement for All Employees

[Asia Economy Reporter Yu Je-hoon] Renault Samsung Motors, facing a crisis, has entered a ‘slimming down’ process for survival, intensifying conflicts between labor and management. The management has launched a survival plan, including voluntary retirement for all employees to strengthen profitability, while the labor union has responded with a delayed strike vote.

According to industry sources on the 1st, the Renault Samsung labor union will begin a strike vote over two days targeting all union members. On the 1st, absentee voting will take place, and on the 2nd, the main vote will be held for the remaining union members. If this strike proposal is approved, the Renault Samsung union will gain the legal right to strike.

There are multiple reasons why the Renault Samsung union has moved to a strike vote. Renault Samsung remains the only domestic automaker that has not yet concluded the 2020 wage and collective bargaining agreement. The union is reportedly demanding a base pay increase of 70,000 KRW. Additionally, the recent launch of the survival plan, which includes voluntary retirement for all employees and the sale of the Ilsan Technostation (TS), has deepened the rift between labor and management. The union is pressuring management through ‘union guidelines related to voluntary retirement’.

Renault Samsung’s struggles since the new year stem from worsening business conditions. Despite launching six new models last year, including the XM3, total production volume fell 31.5% year-on-year to 112,171 units, marking the lowest level since 2004. Particularly, exports plummeted by 77.7% to 20,227 units after Nissan Rogue production ended in March last year. As a result, Renault Samsung is estimated to have recorded an operating loss last year for the first time in eight years.

The problem is that the ‘future’ is also uncertain. The global automaker industry trend of ‘electrification’ is out of reach, and production volumes for successors like the XM3 after the Nissan Rogue remain undecided. At the Renault Group level, a high-intensity restructuring plan called ‘Renolution’ aimed at achieving a 3% operating profit margin by 2023 has been launched in earnest.

Christopher Loutte, Renault Samsung’s Chief Financial Officer (CFO), recently stated at a forum, "To secure production volume, above all, we must show stakeholders and shareholders that Renault Samsung can overcome the current situation and strengthen price competitiveness."

Accordingly, voices within the union also urge caution regarding the strike. A union official said, "(The strike vote) is not solely for striking but is to secure defensive rights," adding, "We will decide on specific future policies through the dispute countermeasure committee after reviewing the main negotiation results." Renault Samsung labor and management plan to attempt further negotiations through the 5th main negotiation session on the 4th.

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