Renault Samsung faces another labor dispute
Renault Samsung is expected to go through another labor-management feud as the company launched a voluntary resignation program at its plant in Busan, citing a decline in the company’s manufacturing output, according to industry officials, Friday.
Its labor union immediately countered the argument, saying the plant is lacking manpower and the program is a tactic to rake in profits by slashing jobs, adding it would employ “every possible measure” to defy the management’s move.
According to the automaker, Renault Samsung announced the voluntary resignation program, named the “New Start Program,” on Thursday and began receiving applications for resignations from all Busan plant employees except for those who have the lowest pay grade.
The company will receive applications until Sept. 27. For those leaving the plant, the company will pay them a “new start aid” worth up to 36 months of their salary. A number of other severance payments will also be provided.
This is the first time that Renault Samsung has launched a mass job cut since 2012.
“As the output of the plant declines, the company finds it necessary to reduce its workforce,” a Renault Samsung official said. “From next month, the plant’s output will decline from 60 vehicles per hour to 45, meaning the output will decline by 25 percent.”
The company said it did not set the number of employees it seeks to sack, but industry officials expect at least 400 jobs will likely be slashed.
Renault Samsung has been suffering from a series of difficulties in its sales and manufacturing output.
From January to August, the company delivered 114,705 new vehicles, down 27.1 percent from a year earlier. Along with delays in introducing new cars to the domestic market, which came amid a long feud between management and the union over last year’s wages which hurt the company’s output and reputation.
Greater pressure for the company is the discontinuation of the Nissan Rogue, which Renault Samsung is manufacturing at its Busan plant on orders from its headquarters, the Renault, Nissan and Mitsubishi Alliance.
The plant has been relying on the Rogue, which accounted for nearly half of its total output. The manufacturing deal for the Rogue will virtually end this year, but the company is yet to get a new model replacing the volume of the Rogue from the headquarters.
Renault Samsung has been making its pitches to the headquarters for the production contract of the XM3 compact SUV for export to Europe, but it is yet to win a deal. If it fails to win the model, Renault Samsung expects the plant’s output will decline from 215,700 vehicles last year to 120,000 next year and 96,000 in 2022.
“Initially we expected the plant may be able to get results on the XM3 export models, but it continues to be delayed and we are not sure whether we can assemble the model even in the second half of next year,” the official said.
Over the company’s claim, however, the union said “there is no reason for Renault Samsung to go through a restructuring” and it will use “every possible measure.”