Renault Samsung’s’deterioration’… No recovery on strike

Renault Samsung Motors is facing a deterioration. Sales fell into hell due to the labor-management conflict that has continued since last year.

To make matters worse, the union is preparing to strike. On the 1st and 2nd, the strike is holding voting for and against the strike.

If it is confirmed by approval, the wavelength is expected to grow out of control. There are concerns that Renault Samsung may reach a point where it is impossible to recover according to the result of the vote.

According to Renault Samsung on the 2nd, the company sold a total of 6152 units in January. Compared to the same period last year, it decreased by 31.8%.

Exports recorded 2,618 units, an increase of 160.2% compared to the same month last year due to full-scale overseas sales of XM3. On the other hand, domestic demand fell 55.9% with only 3534 units.

The biggest factor in earnings deterioration is the unstable company situation.

Renault Samsung’s labor and management have not yet concluded the 2020 labor union. Last month, as the management announced a survival plan including hopeful retirement, the labor-management conflict seems to intensify.

Renault Samsung is accepting applications for retirement from all employees until the 26th. Prior to this, executives reduced 40% and executive wages 20%.

The union is preparing to strike against this. It is observed that group action can be initiated according to the results of the strike votes held for two days from the 1st to today.

If the union acquires the right to strike legally and takes action, it is highly likely that Renault Samsung will be pushed to a state where it is impossible to recover.

Most of all, the biggest risk factor is that it can break the expectations of Renault headquarters and take a break to secure XM exports.

Renault Group announced a new management strategy’Renaulution’ on January 14, and selected Korea as a representative underdeveloped region. They pointed out Renault Samsung and said it improved profitability.

On the 29th of last month, Jose Vincent de Los Mojos, Vice Chairman of Renault Group’s’second man’, visited the Busan plant in person and expressed concerns about the strike.

Vice Chairman Mojos said, “The strike rate of Renault Samsung’s Busan plant is more than five times that of other global plants. As the quality is still high, it is very important to secure production competitiveness.”

As such, the Renault Group and its global business sites are paying attention to the Busan plant. The overall view of the industry is that if a strike proceeds in this situation, the consequences such as failure to secure XM supplies will be irreversible.

Domestic demand is also a problem.

In addition to the labor-management conflict, the possibility of the withdrawal of the headquarters is added, and domestic sales are likely to fall further. In the unstable situation of Renault Samsung, customers can choose other similar models.

At the Industrial Development Forum held on the 28th of last month, Christoph Butte Renault, Chief Financial Officer (CFO) of Samsung, suggested the possibility of withdrawal, saying, “I do not want to leave Korea, but if I want to do business in Korea, the help of everyone (union and government, etc.) is desperate.

Now, attention is focused on the outcome of the union’s pros and cons. Depending on the choices of the members, it may go to the normalization stage, or it may turn out to be out of control.

An industry insider said, “From the current atmosphere, there seems to be a high possibility of a strike if the approval is confirmed. It is not an exaggeration to say that the future of Renault Samsung depends on the precious votes of the union members. “He said.