It was confirmed that Dominic Signora, president of Renault Samsung Motors, expressed his intention to appeal to employees for the need for restructuring.
In a recent letter to employees, Mr. Signora said, “It is a sad reality that we cannot overcome this crisis without enduring the pain of cutting bones.”
“As part of the survival plan, we are receiving voluntary hopeful retirement from all employees,” he said. “I hope that it will help you understand the situation where Renault Samsung is facing and the RSM survival plan to overcome it.”
Renault Samsung has cut 40% of all executives this year and 20% of the remaining executives’ wages this year, and has entered the’survival plan’ for all employees except those who have entered the second year or less to retire.
However, it is said that the number of hopeful retirees this time was quite low as the unions urged union members not to retire.
Signora said, “Last year, the total number of sales combined with sales and exports in the domestic market and the production volume of the Busan plant reached the lowest level in 16 years since 2004.” “In particular, the export performance of Nissan Log production ended last March. It has decreased by nearly 80% compared to the previous year.”
In addition, “Even in poor performance, the amount of fixed expenses including labor costs remained unchanged, so the company’s losses were inevitably aggravated. As a result, the company’s cash holdings of 200 billion won last year were exhausted.” “As the amount decreases further, the urgency for drastic cost reduction is growing.”
Accordingly, President Signora appealed that restructuring is necessary to improve performance through the survival plan.
Before President Signora’s appeal, the French Renault Group, a major shareholder, warned of Renault Samsung’s profitability.
On the 9th, Jose Vicent de los Mojos, vice chairman of manufacturing and supply of Renault Group, sent a letter to Renault Samsung employees, saying, “The factory manufacturing cost in the Busan plant is twice that of Spain, and there is a problem with competitiveness.” It may not be appropriate to produce and deliver it to Europe,” he warned.
“We are going through a difficult time that we have never experienced, and if the survival plan is not followed, we will find a new way.”
Meanwhile, the labor and management of Renault Samsung Motors have not yet completed the labor negotiations last year.
It is reported that the union side steadily raises the basic salary and the management side maintains the position of paying lump sum payments such as negotiated settlement payments.