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Renault Samsung, union cut tentative deal after 62 strikes

May 17,2019
Renault Samsung Motors said Thursday it reached a tentative agreement with its labor union over wages and working conditions, signaling an end to a drawn out labor dispute that began last fall.

The Korean unit of the French automaker said it struck an agreement with its union after 40 hours of non-stop discussions that ended at 6:20 a.m. Thursday. The tentative settlement will be voted on by unionized workers on May 21.

Since June last year, the union has called for the company to follow the minimum wage law, claiming that the required rate is not being paid. It also demanded that management improve working conditions and said that mismanagement has led to difficulties and mass layoffs.

The company has emphasized that cost increases could harm its competitiveness. Jose-Vicente De Los Mozos, executive vice president of manufacturing and supply chain for the automaker’s parent company, Renault Group, visited the plant earlier this year and said costs are too high.

A spokesperson for the automaker said workers at the Busan factory are already paid better than other Renault Group employees.

Until April 19, the automaker’s union has gone on 62 strikes since last October for a total of 250 hours, causing production losses to the value of 14,320 vehicles, according to the automaker. The dispute has continued well past the March 8 deadline set for the conclusion of negotiations.

Due to the strikes, Renault Samsung Motors’ sales between January and April this year fell 40 percent to 52,930 units from 87,996 units posted in the same period last year.

As its factory’s utilization rate has fallen by more than 20 percent, Renault Samsung Motors temporarily suspended operations of its Busan plant last month. The automaker said it reduced this year’s production target from 200,000 units to 160,000 units.

The union and management started meeting again this week for the 28th round of negotiations. The dispute recently escalated, as the union announced Tuesday that it will stage a full-scale strike if meaningful progress is not made in the wage negotiations.

Under the tentative agreement, each Busan plant worker will be paid 1 million won ($840) in bonuses and a 35,000 won raise in monthly meal stipends, but their base pay will remain the same. The automaker is also going to provide around 10.76 million won to each worker as performance-based pay.

The Busan plant currently employs around 2,300 workers.

In terms of working conditions, employees’ lunch times will be extended from 45 minutes to 60 minutes. The automaker also vowed to hire 60 new workers and launch a committee to continue the discussion of enhancing working conditions. It is also investing 1 billion won to provide medical benefits for workers.

Plant workers have also asked the management for the right to participate in personnel decision-making, but the request was refused and not included in the tentative agreement Thursday.

Renault Samsung Motors CEO Dominique Signora earlier refused to consider the union’s human resources demands when meeting with Busan Mayor Oh Keo-don last month.

A spokesperson for the automaker said the agreement is projected to easily pass as a growing number of workers have been concerned about speculation that Renault Group might give up on its operation in Korea.


BY KO JUN-TAE [ko.juntae@joongang.co.kr]