Renault Samsung President: "Cash Rapidly Depleting, Restructuring Unavoidable"

Dominic Signora, President of Renault Samsung Motors

[Asia Economy Reporter Changhwan Lee] The CEO of Renault Samsung Motors, which is struggling due to worsening management, sent a letter to employees appealing the company's situation and the urgency of restructuring.

According to the automotive industry on the 16th, Dominic Signora, CEO of Renault Samsung, sent a letter to employees last week stating that the company recorded a loss for the first time in eight years since 2012 due to last year's performance, and has started a survival plan, which includes accepting voluntary retirement applications from all employees.

CEO Dominic explained the background of the voluntary retirement by saying, "Last year, the total sales volume combining domestic market sales and exports, as well as production volume at the Busan plant, recorded the lowest level in 16 years since 2004. Moreover, export performance dropped by nearly 80% compared to the previous year as Nissan Rogue production ended in March last year."

He added that the depletion of the company's cash reserves is an even bigger problem. He emphasized, "Despite poor performance, fixed costs including labor costs remained unchanged, which inevitably increased the company's losses, resulting in the depletion of 200 billion KRW in cash reserves last year."

He continued, "Even last month, due to sluggish sales, about 100 billion KRW more in cash was reduced, increasing the urgency for drastic cost-cutting."

Ultimately, the survival plan is unavoidable, and restructuring is being carried out to quickly improve performance. Key points of the survival plan include not only restructuring but also enhancing the value of Renault Samsung products in the domestic market and securing the highest competitiveness of the XM3 European export model.

CEO Dominic said, "Our unfortunate reality is that we cannot overcome this crisis without enduring excruciating pain. From now on, we will take proactive steps to reach the break-even point as quickly as possible and escape the current situation where cash is rapidly being depleted."

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