Renault Samsung Also Prepares Tentative Agreement... Completed Vehicle Labor-Management Likely to Reach Settlement Without Summer Strike This Year

Hyundai Motor, Kia, Korea GM, Ssangyong Motor Reach Labor Agreement Without Disputes
Renault Samsung to Hold Employee General Meeting on the 3rd for Approval Vote

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] The wage and collective bargaining negotiations between domestic automakers and labor unions are mostly concluding without disputes this year. Although there were considerable concerns that the 'COVID-19 bill' would pose a major obstacle, it is interpreted that the impact of the vehicle semiconductor supply shortage causing production disruptions and the transition to future vehicles are the main factors behind this outcome.

According to the industry on the 1st, Renault Samsung Motors labor and management succeeded in reaching a tentative agreement on the 2020 and 2021 wage and collective bargaining negotiations during the 13th round of talks held the previous day. The agreement centers on freezing the base salary for 2020 and 2021 while providing a one-time payment worth approximately 8.3 million KRW and establishing some new allowances.

The Renault Samsung labor union plans to hold a general meeting of employees on the 3rd to conduct a vote on this tentative agreement. If the agreement passes at the general meeting, all five domestic automakers are expected to conclude their wage and collective bargaining negotiations without disputes this year.

Previously, automakers such as Hyundai Motor Company, SsangYong Motor, Kia, and Korea GM also reached agreements without disputes in their wage and collective bargaining negotiations. Hyundai Motor and SsangYong Motor have concluded their negotiations without disputes for 3 and 12 consecutive years respectively, while Kia and Korea GM settled their negotiations without strikes for the first time in 10 and 3 years respectively.

Initially, this year's wage and collective bargaining negotiations were expected to be difficult due to the impact of the COVID-19 pandemic last year. However, since the end of last year, the situation has changed somewhat as the shortage of vehicle semiconductors and the resulting production disruptions have intensified.

In fact, Hyundai Motor and Kia experienced production disruptions of approximately 70,000 and 60,000 units respectively in the first half of the year due to the shortage of vehicle semiconductors, and Korea GM also faced production disruptions of about 80,000 units. The impact of the semiconductor supply shortage still persists. Korea GM has decided to reduce production by 50% at its Bupyeong Plant 1, which produces the best-selling model Trailblazer, starting this month.

The accelerating paradigm shift in the automotive industry toward electrification has also had a significant impact. In fact, the labor and management of Hyundai Motor, Kia, and Korea GM devoted considerable effort in this year's negotiations not only on traditional issues such as wages but also on discussing an 'industrial transition agreement' related to workforce supply and domestic production base establishment in response to electrification.

For example, Hyundai Motor labor and management agreed through a special future agreement on industrial transition response that domestic factories and research centers will continue to serve as leading bases for future industries, and through this, they will jointly strive to ▲secure employment stability ▲practice coexistence with parts suppliers ▲strengthen trust with customers and the public.

Additionally, they agreed on securing a profit structure to respond to electrification and future new businesses to continuously invest in domestic factories and research centers, measures to enable mass production of future mobility in domestic factories considering various circumstances, employment stability measures in the powertrain sector, job transition training in preparation for industrial transition, and improvements to the wage system.

An industry insider commented, "It is encouraging that automakers and labor unions are resolving issues through dialogue and consultation beyond the conventional strikes during this industrial transition period," adding, "Now, rather than confrontation such as strikes, it is a priority to establish a joint labor-management strategy to prepare for the era of future vehicles."

Even in the case of Renault Samsung, where only the approval vote remains, there are high expectations for a swift resolution given the challenging situation. This is because the production target for this year has drastically decreased to around 100,000 units, and stabilizing production is crucial to allocate new car volumes following the XM3.

Renault Samsung also expressed optimism regarding this, stating, "If the tentative agreement is finally reached, it will resolve the prolonged conflict and not only stabilize XM3 production but also brighten the prospects for securing future volumes for Renault Samsung related to eco-friendly vehicles jointly developed by Renault Group and China's Geely Automobile."

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