Renault Samsung Tightens Cost-Cutting Measures... Labor-Management Conflict Remains a Spark

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] Renault Samsung Motors is tightening cost-cutting measures by implementing voluntary retirement for all employees and promoting the adoption of a single-shift system. However, unresolved issues such as wage and collective bargaining negotiations with the labor union remain a lingering concern.

According to industry sources on the 1st, Renault Samsung plans to switch the Busan plant to a single-shift work system starting from the 8th and is considering implementing rotational leave when idle manpower occurs. This is a drastic measure taken amid stagnant domestic and export sales.

Renault Samsung is preparing to change the work system because both domestic and export sales are sluggish. In January alone, domestic and export sales totaled only 6,152 units. Accordingly, Renault Samsung recently cut its annual production target for this year from 157,000 units to around 100,000 units, a reduction of about 30%. The company states that the work system change is inevitable due to the lowered production target.

In addition, Renault Samsung is putting its life on cost reduction. The voluntary retirement implemented on the 28th of last month is a prime example. This move follows orders from headquarters requiring intensive productivity improvements to allocate production volume for the future-critical 'New Arkana (XM3)'. The Renault Group recently devised a high-intensity restructuring and profitability improvement plan through the 'Renolution' plan.

Jose Vicente de los Mozos, Vice Chairman of the Renault Group, who warned that "if the promise (productivity improvement) that the Busan plant must fulfill is not kept, new methods will be sought," visited the Renault Samsung Busan plant on the 25th of last month to once again urge strengthening competitiveness.

However, despite these circumstances, conflicts between labor and management show no signs of resolution. Renault Samsung is the only domestic automaker that has not even concluded the 2020 wage and collective bargaining negotiations and has also experienced conflicts related to voluntary retirement. Regarding the transition to the single-shift system, the union maintains that "implementing a single-shift system while maintaining a production rate of 60 units per hour is inappropriate."

Meanwhile, the Renault Samsung labor union is reportedly proposing to hold the 7th main negotiation session on the 3rd and the Employment Stability Committee on the 4th to discuss wage and collective bargaining issues and the work system transition.

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