Renault Samsung workers overturn wage deal, set for another strike

Overturning a wage deal clinched in June, unionized workers at Renault Samsung have voted to hold a sit-in protest, according to members of the union Wednesday, although the automaker said it would continue with the labor-management negotiations which kicked off in September. 

Of more than 2,000 unionized workers at the South Korean unit of the French automaker Renault, 66.2 percent voted to go on strike. The labor union and management had reached a wage deal on June 24, bringing an end to a year-long strike. 

In the June agreement, they pledged to pursue a win-win cooperation and create a peaceful work environment at its factory in the southern port city of Busan.

While the labor union is yet to decide the exact period and scale of the sit-in protest, industry insiders said its decision would lead to further decline in the production rate at the carmaker’s plant.

In July, a month after their deal, the labor union asked the company for an 8.01 percent increase in wage, additional payment for union members, employment of additional personnel, scrapping of the wage peak system and 4 million won ($3,350) in incentives by the year-end. 

The negotiations over the latest deal began in September, where the company’s management vowed to come up with its decision by early December during the talks held on Nov. 28. 

A Renault Samsung representative told The Korea Herald that while the management is finalizing its decision, the unionized workers began voting on their own. 

“But it is not that the labor union will hold a sit-in protest immediately. They just voted to stage a strike, which is separate from continuing negotiations. Whether from the company side or from the unionized workers’ side, if negotiations are necessary, we are going to continue our talks,” a Renault Samsung official told The Korea Herald. 

(Renault Samsung)

According to industry experts, due to the 62 rounds of labor union strikes held from October last year to June this year, Renault Samsung suffered damages worth around 300 billion won, resulting in a major loss of its production schedule of at least 13,000 units.

During the strike, operations at its only plant in Busan also halted from April 29 through May 3, following significantly reduced production volume.

According to Renault Samsung, the temporary shutdown of its factory came as output volume plunged to as low as 120,000 for domestic sales, while it requires a minimum 200,000 units to be produced annually to keep it going.

The company said its priority is to maintain a set level of productivity at the plant, so it can secure certain export models from its parent company Renault. 

Due to last year’s continued strike, Renault Samsung failed to allocate vehicles for production, following the contract expiry with Nissan Qashqai -- due to the “severely hurt relationship with the Renault Group.” 

As Renault Samsung’s production of Nissan’s sport utility vehicle Rogue nears an end in March, the management has been working to achieve production allocation for crossover SUV XM3 for exports from the Renault Group, to compensate for the void. 

The Nissan Rogue has been a symbolic model that put Renault Samsung’s Busan plant on track. It sold 227,577 units last year, with the Rogue accounting for 47 percent of the total output and 78 percent of its exports. 

By Kim Da-sol (ddd@heraldcorp.com)