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| Renault Samsung management and union holding extended meeting on wage hike and job security issues, last month. Yonhap |
By Kim Hyun-bin
Major foreign carmakers here have been struggling recently, concurrently hit by poor sales, chip shortages and union management conflicts, leading to speculation that Renault Samsung and GM Korea, and the owners of SsangYong Motors, are contemplating abandoning the Korean arms of their businesses if the situation gets worse.
According to industry watchers, the union at Renault Samsung will continue to stage walk outs indefinitely if management does not reverse a decision to temporarily close the company's sole plant.
"We will continue our strike until management rolls back its decision to close the plant," a union representative said.
The two sides have held nine rounds of negotiations but failed to narrow their differences over wages backdated for 2020 as the automaker struggles with a drastic drop in sales ― it saw a 28.6 percent drop in April year-on-year.
"There has been a rise in orders from Europe, so we suggested resuming two shift normal operations, up from the current single one," a Renault Samsung official said. "But the union refused. The number of people taking part in the strike is small so we are currently working with employees who are not on strike, but the union has been staging strikes within the plant hindering operations. When the next negotiations between management and the union take place is undecided on at the moment."
A statement from CEO Dominique Signora read, "If we lose the chance our future will become more uncertain. In the past, there could be one more chance but this time is different"; hinting that Renault Samsung could withdraw from Korea if the situation is not resolved.
"The CEO's message went out early Monday as a monthly routine message to employees and the decision to halt operations came Tuesday, so there seems to be some misinterpretation of the CEO's message to some extent," the Samsung official added.
GM Korea is also facing pressure from its union for a wage hike of 99,000 won per month and a 10 million won bonus for this year. However, the company suffered a 316.9 billion won operating loss last year, making it difficult for management to accept the union's demands.
"The union held an extended meeting and finalized their request but nothing has been sent to management and no discussions have been held," a GM Korea official said.
Last year, GM Korea suffered a 25,000 car production loss due to a strike; while sales for April this year plunged 25.4 percent compared to 2020.
SsangYong Motors is undergoing major restructuring after India's Mahindra & Mahindra decided to halt all future investments in the company, forcing it to enter court administered rehabilitation.
As part of this, SsangYong cut 30 percent of its executives ― letting go 10 of 33.
"We are against restructuring focused on laying off employees. We will cooperate with restructuring measures once 100% employment is secured," the SsangYong Motor union said. The company's April 2021 sales also dropped 35.7 percent compared to last year.
"GM Korea and Renault Samsung have limited decision making capabilities as most decisions are made from their headquarters overseas. They are just operating manufacturing plants in the country and we will have to wait and see what their headquarters decide," said Song Sun-Jae, a senior analyst at Hana Financial Investment.
