SEOUL, Apr. 29 (Korea Bizwire) — Renault S.A. on Monday temporarily halted operations at its only plant in South Korea amid a drawn-out dispute with its labor union over wages and working hours.
Renault Samsung Motors Corp., the Korean unit of the French carmaker, plans to suspend the operation of the Busan plant, 450 kilometers south of Seoul, on Monday and Tuesday, the company said in a statement.
The plant suspension comes as Renault Samsung and its union haven’t reached any agreement over wages and other matters for the past six months. The union staged 62 rounds of strikes from October through April 19, resulting in production losses of over 14,320 vehicles.
“The plant will resume operations on Thursday as Labor Day falls on Wednesday,” a company spokesman said. The company and the union will meet Thursday to set the date for talks, he said.
The company wants to maintain a certain output level at the plant by securing export models from its parent company. But the union is more focused on increasing wages and reducing labor intensity.
In particular, the company sticks to its plans to outsource the manufacturing of vehicles, if needed, and relocate assembly line workers against their will. The union is strongly opposed to the idea.
Renault Samsung produces the SM3 compact, the SM5 midsize sedan, the SM6 upper midsize sedan, the SM7 large sedan, the SM3 Z.E. all-electric car and the QM6 SUV. It also produces Nissan Motor Co.’s Rogue SUV on a manufacturing contract. The QM3 compact SUV is built in Spain and shipped to Korea.
The company plans to manufacture the XM3 compact sport utility vehicle in Busan for local sales in the first half of 2020 but expressed concerns that the production may not begin as scheduled due to continued strikes.
It is urgent for the company and the union to sign a wage and collective agreement deal in order to secure production volume for the SM3 and the XM3 for exports to Europe, Renault Samsung CEO Dominique Signora said on April 17 when he met Oh Keo-don, mayor of Busan Metropolitan City. He also asked for joint efforts to resolve the extended labor dispute.
Renault will continue to invest in Renault Samsung, as the Korean unit has played a pivotal role in developing its D-segment passenger car models such as the SM6 sedan and the QM6 sport utility vehicle for the French auto group, Signora said.
The union said it will continue to go on strike until the company accepts their demands.
The company has continuously reported profits since 2012 but reduced its workforce. Even if the company secures production orders of the SM3 and the XM3 for export, the company said they may outsource the manufacturing of vehicles and relocate workers, the union claims.
“Outsourcing will cut costs, as well as jobs,” union spokesman Nam Ki-tae said.
Affected by strikes, Renault Samsung’s sales fell 40 percent to 39,210 vehicles in the January-March period from 64,900 units in the same months a year earlier.