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Renault Samsung Motors suspends night shift operations

Jan 11,2020
Renault Samsung Motors partially closed its sole auto plant Friday as continuing guerilla strikes dramatically reduce production and drive the company into the red.

The decision comes as the Korean unit of Renault faces huge losses from conflict with its unionized workers, conflicts which is threatening the survival of the company and its partners.

A Renault Samsung Motors spokesperson said by phone Friday that the union’s walkouts, which started late last year, forced Renault Samsung Motors to close the plant for the night shift.

According to the spokesperson, the union went on strike for a total of 151 hours from Dec. 28 to the end of Thursday, which caused around 120 billion won ($103 million) in damage at its only plant in the country. The source added that the Busan factory is now running at below 20 percent of its full capacity as a result of the walkouts.

It is the second time that Renault Samsung Motors decided to partially shut down its plant voluntarily. It first closed the factory in June 2018, when the automaker halted the night shift for a single day while negotiating with its union over wage increases.

The latest partial shutdown, which is also prompted by protracted wage negotiations between union and management, is expected to continue until both sides return to the table for negotiations, although no exact date is set for now.

“It is unfortunate for us to close the plant by ourselves, but the union showed no manners in the negotiations process, so we had to do what was needed to prevent ourselves from more damage,” the spokesperson said.

“For the latest guerilla strike, the union was supposed to resume negotiations Thursday as agreed with management the night before, but the workers suddenly decided to go on another walkout without even letting us know.”

Since the current leaders for the union assumed positions in early 2018, Renault Samsung Motors workers went on strikes for around 500 hours, which caused more than 500 billion won in financial damage to the automaker.

The continuing conflict has been mainly centered on disagreements on wage increases. For last year’s wage deal, the union has been asking for an 8.01 percent increase in base pay, a bonus of 4 million won and a promise for new hires.

Renault Samsung Motors has been refusing to raise the base wage level but instead offered a 10-million-won payout for each worker and some structural changes to the wage system, as its declining sales and contract production volume were already resulting in huge losses.

In 2019, Renault Samsung Motors sold a total of 90,591 cars, down 34 percent from 137,208 units posted a year earlier. Its production contract with Nissan for Rogue SUVs came to an end late last year.

The continuing labor conflict is hurting production and sales for its 250 partnering auto suppliers, the source said.

As profit levels fell, hard-line labor action is losing popularity among the workers, with the participation rate for partial strikes falling from 40.1 percent on Dec. 23 to around 26 percent by Friday.

Even in the face of such conflicts, Renault Samsung Motors said the automaker remains focused on keeping its promise to introduce six new vehicles into the local market this year. It is still set to offer the new XM3 SUV to Korean consumers in coming months.

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