Renault Group’s warning… “If the Busan plant does not strengthen its competitiveness, we will find a new way”

Input 2021.02.09 10:05 | Revision 2021.02.09 10:32

France’s Renault Group warned that Renault Samsung Motors will find new methods if the Busan plant’s production competitiveness is not secured.

On the morning of the 9th, Jose Vicent de los Mojos, vice chairman of manufacturing and supply at Renault Group, delivered a video message to the employees of Renault Samsung’s Busan Plant, urging them to strengthen their production competitiveness and actively cooperate.

Vice Chairman Mojos said, “When I visited the Busan factory last year, the Busan factory promised to improve its competitiveness in order to secure the export volume of New Arcana (XM3 export vehicle) to Europe.” “We decided to persuade the Busan factory to produce New Arcana European quantities,” he said.

“As of the end of last year, the promise has not been fulfilled, and the manufacturing cost of the factory in Busan is double compared to the capture produced in Spain,” he said. “This is a problem with the competitiveness of the Busan factory, and urgent improvement is needed. I was concerned.

Next, Vice Chairman Mojos ordered the Busan plant to achieve three goals: ▲Best quality ▲Production cost reduction ▲Compliance with production delivery time, for the official entry of Renault Samsung’s SUV XM3, which has been exported since the end of last year, to enter Europe. .

He said, “The Busan plant is bound to have a high transportation cost burden due to distance limitations. However, if the manufacturing cost of the plant is twice that of the European plant and transportation costs are added to it, it would not be appropriate to produce a vehicle in Korea and deliver it to Europe. I can” he pointed out.

According to Renault Samsung, the Busan plant’s production competitiveness (QCTP) ranking among the global factories within the Renault Group fell from 5th in 2019 to 10th in 2020. In particular, the factory manufacturing cost score of the Busan plant as of last year was 17th out of 19 factories in the world belonging to Renault Group, far below the average.

Vice Chairman Mojos said, “The Busan factory must produce new arcanas at the same level of factory manufacturing cost as the capturing made in Spain and release them to the European market. This is the responsibility of the Busan factory.” “We need to make sure that there is no obstacle to sales in the European market.”

“I believed in the employees of the Busan plant and decided to produce the new arcana, but today we are facing a serious problem.” “You know how to solve it, and the survival plan and strategy of the Busan plant is the top priority for yourself. The enemy’s survival plan.”

“The survival plan currently underway by Renault Samsung Motors is a way to increase the competitiveness of the Busan plant and continue the future,” he said. “If this promise that the Busan plant must fulfill, we will find a new method.”

The Renault Group announced last month a strategy of’Renolution’ that focuses on profitability in order to strengthen competitiveness, and designated Korea as a region to strengthen profitability along with Latin America and India. In the case of Brazil in Latin America, which was mentioned as a profitability improvement region along with Korea by Renolution, it has already cut 1,300 workers and cut 20% of the wages of new employees. The period of wage and collective agreements with labor unions was also changed to four years.