 Renault Samsung Motors CEO Francois Provost |
By Kim Tae-jong
Renault Samsung Motors (RSM) will restructure its workforce through a voluntary retirement program in an effort to cope with prolonged sluggish sales at home and abroad.
The automaker said Friday that it will accept applications from employees for the voluntary retirement program from Aug. 13 to Sept. 7. This is the first restructuring since France’s Renault acquired Korean carmaker Samsung Motors in 2000.
“Amid declining sales, we tried to cut operating costs,” an official from RSM said. “And we concluded that the voluntary retirement program is an inevitable step to be competitive in the market and revive sales.”
Employees in most sectors are subject to the restructuring from research and development and design to manufacturing and management.
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According to the company, it only sold 83,062 cars in the first half of the year _ a 41.7 percent drop in the domestic market and a 26.1 percent decline overseas, compared to the same period last year. Due to the fall, RSM has suspended operations at its Busan plant several times this year.
It was also the biggest downturn in year-on-year sales among the five major players in the local market _ the other four being Hyundai, Kia, GM Korea and Ssangyong.
In June, it sold just 4,008 vehicles locally, dropping it to fifth in terms of sales volume for the first time and was overtaken by Ssanyong, which sold 4,033.
To revive its ailing Korean affiliate, Carlos Ghosn, chairman of Renault Nissan Alliance, visited Seoul last month.
This drew much attention because it was his first since February, 2008, and comes only a month after two executives of the French automaker came to Korea to inspect the local affiliate and introduce a plan to reinvigorate it.
During his visit, Ghosn unveiled a rescue plan to reverse the fortunes of RSM, including an injection of $160 million to roll out Nissan’s next-generation crossover Rogue SUVs at the firm’s assembly line in Busan from 2014.
The automaker said this year will be a turning point for boosting sales here especially after introducing the face-lifted SM3 and mid-size SM5 this year. It will also launch the all-electric SM3, the country’s first mass produced zero-emission car and a small SUV next year.
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