Automaker Labor Disputes Settled Without Strikes... Final Piece 'Renault Samsung'

Korea GM Provisional Agreement Vote Passed... Kia Also Prepares Provisional Agreement
Renault Samsung Faces Major Labor-Management Disagreements on Base Pay... 13th Negotiation Today

[Asia Economy Reporter Yu Je-hoon] Wage and collective bargaining negotiations between Renault Samsung Motors' labor and management remain stagnant. This comes as competitors such as Hyundai Motor, Korea GM, and Kia are reaching wage and collective agreements without disputes or preparing tentative agreements one after another.

According to industry sources on the 25th, Renault Samsung labor and management will hold the 13th main negotiation session in the afternoon to resume discussions on wage and collective bargaining. This is six days after the 12th main negotiation session on the 19th ended without any progress.

There are still significant differences between labor and management. The management proposed a plan to freeze the base salary and pay a one-time bonus of 8 million KRW, but the union finds it difficult to accept the base salary freeze. Previously, the Renault Samsung union proposed a 71,687 KRW increase in base salary and a 7 million KRW encouragement bonus as their demands.

Both labor and management, who failed to conclude last year's wage and collective agreement, are showing a willingness to reach an early settlement, but it is difficult to predict the outcome. A Renault Samsung union official said, "The management has decided to present a 'final proposal' in this negotiation," adding, "If the proposal contains progress, subsequent procedures will proceed quickly, but if it does not meet the expectations of the union members, there is a high possibility of another deadlock."

The problem is that competitors are preparing to leap forward by concluding wage and collective agreements without disputes one after another. The Korea GM union approved the tentative agreement with a 65.7% approval rate in the second vote yesterday. This is the third successful dispute-free settlement following Hyundai Motor and SsangYong Motor.

Kia, which had suffered from strikes for nine consecutive years until last year, also received a green light for a dispute-free settlement. Kia labor and management succeeded in preparing a tentative collective bargaining agreement after 13 negotiation sessions yesterday. Specifically, it includes ▲a 75,000 KRW increase in base salary ▲200% management performance bonus + 3.5 million KRW ▲2.3 million KRW quality improvement encouragement bonus ▲100,000 KRW traditional market gift certificates ▲13 shares of free stock.

The reason why completed car labor and management succeeded in dispute-free settlements is attributed to production disruptions caused by the shortage of automotive semiconductors and COVID-19. In the case of Korea GM, production was disrupted by 80,000 units this year alone due to the semiconductor shortage, and Hyundai Motor and Kia also experienced production disruptions of 70,000 and 60,000 units respectively. Both labor and management hurried to conclude wage and collective agreements.

Industry insiders advise that since Renault Samsung's situation is also challenging, both labor and management should make a bold decision. In fact, Renault Samsung posted a deficit of 79.7 billion KRW last year alone, and this year, due to sluggish sales and other factors, it lowered its production target by about 30% from 157,000 units to 100,000 units.

Especially for Renault Samsung, stabilizing production of its main model, the XM3, is crucial for survival. As XM3's exports to Europe gain momentum, repeated production disruptions could negatively affect the allocation of subsequent new models at the Renault Group level. Renault Samsung experienced production disruptions of 5,000 units this year alone due to labor-management conflicts and other issues.

An industry official said, "While the Renault Group is conducting restructuring efforts, what Renault Samsung needs most is production stabilization and quality improvement," adding, "Both labor and management should focus on reducing risks."

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