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Renault Samsung, union deal rejected by workers

May 22,2019
The ongoing dispute between Renault Samsung Motors and its labor union again failed to come to a close as workers voted against a tentative agreement reached with management last week, signaling a full-scale strike is coming in the near future.

After a seven-hour-long vote held at the company’s Busan plant, 51.8 percent, or 1,109 workers, voted against the draft deal over wages and working conditions, the union announced soon after the vote was finished at 7 p.m. Tuesday. The rest of the voters, 1,023 employees, voted for the agreement.

The vote result is in stark contrast to what the Korean unit of the French automaker believed would happen when it reached an agreement with the union after 40 hours of non-stop discussions last week.

The company thought that the agreement on workers’ wages for 2018 would easily pass as a growing number of workers have been concerned about speculation that Renault Group might give up on its operation in Korea.

Under the tentative agreement, each Busan plant worker was to be paid 1 million won ($837) in bonuses and a 35,000 won raise in monthly meal stipends, but their base pay would remain the same.

The automaker was 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 were to 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 also promised to invest 1 billion won to provide medical benefits to 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.

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.

As the tentative agreement is no longer valid, the automaker has to continue its negotiations with the labor union over last year’s wages that has continued well past the March 8 deadline set for conclusion. It is also tasked with starting negotiations for this year’s wages.
The automaker also has to strategize how it will re-up its Busan plant’s utilization rate and complete production orders for this year while appeasing workers.

During the 28th round of negotiations last week, the union announced it will stage a full-scale strike if meaningful progress is not made in the wage negotiations. By April 19, Renault Samsung Motors’ union went on 62 strikes since last October for a total of 250 hours, causing production losses of 14,320 vehicles. 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.

Renault Samsung Motors was also considering suspending operations again early next month.

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