“Loyalty, it becomes insignificant like dust”… Renault Samsung labor-management conflict going to extreme

Input 2021.01.22 15:00

When Renault Samsung Motors, which recorded a deficit in eight years, unveiled a major restructuring plan, the union strongly opposed and condemned the management. In particular, the labor and management of Renault Samsung Motors passed the year in a state that was the only one among five domestic automakers to complete the collective wage agreement. In addition, the tensions of the strike are rising again as the head of the Gang Kyung-pa, who had been demanding to join the KCTU, is reappointed as the union chairman.

Renault Samsung’s union released a statement of the branch manager on the 22nd and strongly condemned the management’s decision, saying, “I express strong regret for the decision of the company’s incompetent and irresponsible management.” Earlier on the 21st, Renault Samsung Motors announced a’survival plan’ to escape the deficit. The main point is to prove the competitiveness of the Busan plant and reduce the number of personnel, and it will reduce 40% of all executives, 20% of the wages of the remaining executives, and enforce the desired retirement for all employees.

In a statement that day, the union said, “Forcing a hopeful retirement because of a single year’s deficit is a feeling of being abandoned by a company that has devoted itself to working for 20 years.” did. He said, “I am angry at the appearance of forcibly cutting off the purchase of new cars,” he said and asked, “Please give the workers a job growth with blood sweat.”

Renault Samsung Motors has succeeded in normalizing management by tightening the belt before. Renault Samsung, which posted a deficit of 215 billion won in 2011 and 1721 billion won in 2012 during the global financial crisis, recorded an operating profit surplus of 44.4 billion won through the’Revival Plan’ in 2012. It developed new cars such as the popular models SM6 and QM6, and took over the production orders for Nissan Log’s Busan plant.

However, due to the lack of product lineup and the aftermath of the coronavirus infection (Corona 19), Renault Samsung again hit an export cliff. In particular, the biggest problem was a sharp decline of 80% from 2019 as the production of Nissan logs, which accounted for 72% of the total export volume of the Busan plant from 2014 to 2020, was terminated. Since then, the operation rate of the Renault Samsung Busan plant, which had not been working since November of last year, has shrunk to 46%.

Following exports, domestic sales were also sluggish. Last year, Renault Samsung Motors rearranged sedan lines such as SM3, SM5, and SM7, which had severe product aging, and introduced high-demand sports utility vehicle (SUV) XM3, Renault Capture, and QM6, but the number of domestic sales was only 9,5939. Renault Group, its headquarters, also announced on the 14th a restructuring plan,’Renolution,’ which will reduce fixed costs by 3 billion euros by 2025, and pointed out Korea as a region that should strengthen profitability.

However, difficulties are expected in Renault Samsung Motors’ plans to overcome the crisis due to the hard-line union. In a statement that day, the union strongly urged the union members to “don’t make a premature choice of retirement, think more carefully, and protect the field.” The current hard-liner union, elected in 2018, led the strike every two consecutive wage negotiations. Last year, after trying to join the metals union under the KCTU, it failed to exceed half of the members’ votes.

The hard-liner union, which has been in office for two more years starting from last November’s election, has already secured the right to strike, and it is possible to strike as long as the members vote. Renault Samsung’s labor-management negotiations in 2020 are sluggish, with only four negotiations being held even after the year has changed. The fourth main negotiations this year, which took place on the same day that the union issued a statement, were also found to have ended without progress.

Inside and outside the industry, it is advised that the labor and management of Renault Samsung Motors, which is facing an important hurdle, should work together to overcome this period. “The urgent need for Renault Samsung Motors to recover with the XM3 is to prove the value of the Korean branch, but it will be absolutely impossible if labor and management do not work together,” said Pil-soo Kim, a professor at Daelim University.