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| Renault Samsung plnat in Busan / Courtesy of Renault Samsung |
By Nam Hyun-woo
The Renault Samsung union has threatened to go on an all-out strike, unless management meets its demand for better "forward-looking" working conditions The move is seen by industry analysts as apparent brinksmanship in their collective bargaining talks that began last year, as it will seriously undermine the company's competitiveness.
The union said Wednesday that it will launch an all-out strike from May 21 for an undetermined period unless negotiations with management show progress.
It said the company has been "stalling in the past 27 rounds of talks for an agreement, and so its walkout is an ultimatum."
Renault Samsung's union and management have been trying to reach an agreement since June 2018, as both sides have shown a stark contrast in base pay, outsourcing, employees' repositioning and several other labor issues.
Reportedly, the two sides are close to reaching an agreement on salaries, but not on other issues.
"We are currently in the 28th round of talks and working on realizing a positive outcome," a Renault Samsung official said.
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| A Renault Samsung assembly line at its Busan plant is halted due to a strike in this undated file photo. Courtesy of Renault Samsung |
Should the workers go on strike, it is expected to deal an irreversible blow to the company's bid to win new models and keep its plant in Busan operational.
Currently, Renault Samsung is in competition with 45 other Renault, Nissan and Mitsubishi plants across the world to earn a manufacturing order from the headquarters of the Renault, Nissan, Mitsubishi Alliance.
So far, the Busan plant has been largely relying on manufacturing the Nissan Rogue, which accounted for half of the plant's total output last year.
Since the manufacturing contract will expire in September, the company has to win new models and it has to prove its efficiency and productivity to the headquarters, but the all-out strike will deal a heavy blow to that.
Renault Samsung has already secured the right to manufacture 40,000 to 45,000 XM3 crossovers annually for domestic sales, but it is yet to see progress in winning car production for overseas markets, which is expected to reach 80,000 a year.
"Renault Samsung was a strong candidate in producing the XM3 for global sales, but a Renault plant in Valladolid, Spain, rose as a strong contender recently, because of the faltering productivity of the Busan plant," said a source with knowledge of the situation.
Since October last year, the union has engaged in 62 partial strikes which lost 250 hours of production. The company also halted the Busan plant for five days last month, in response to the strikes.
The company estimates the partial strikes have incurred 280.6 billion won ($235.9 million) in losses, or 14,320 completed cars.
