Renault issues warning to Korean unit
Renault Samsung's Busan plant / Korea Times file
By Baek Byung-yeul
Jose-Vincente de Los Mozos, deputy alliance executive vice president of manufacturing and supply chain at Renault Group
Renault Group has issued a warning to the striking union of its affiliate Renault Samsung that the Korean unit may receive no new product allocations if the strike continues.
Renault Samsung said Friday that Jose-Vincente de Los Mozos, the deputy alliance executive vice president of manufacturing and supply chain at Renault sent a video message to employees of the Korean unit that they were asked to watch on Feb. 1.
The union of the Korean unit has staged a partial strike 28 times, totaling 104 hours, since October 2018 asking for 100,667 won ($90) raise in basic monthly pay. The Busan plant has manufactured the Rogue SUV for Nissan, which is part of the Renault-Nissan-Mitsubishi Alliance.
In the three-minute-long video, Mozos urged the union to suspend the strike, a Renault Samsung spokesman said.
“We cannot show the video, but Mozos urged the union to suspend the strike while wage negotiations were underway. He also expressed that Renault Samsung would have difficulties in winning production contracts for new models as the strike may contribute to a lack of trust in the Korean unit,” the spokesman said.
Renault Samsung's Busan plant has been operating an assembly line for seven vehicles and the Rogue SUV accounts for about half of its manufacturing output. However, the production contract will end in September so the Busan plant must renegotiate with the parent company to renew the contract.
The spokesman said the competitors for the Busan plant were not local car makers ― Hyundai Motor, Kia Motors, SsangYong Motor or GM Korea ― as it has to compete with Renault's 51 manufacturing plants worldwide.
“Renault Group is different from other car makers as the group has been running its business under the alliance operation system. There are currently 52 subsidiary manufacturing plants of Renault Group across the world and the Korean unit has to compete with the other 51 plants to win the production contract for the Nissan Rogue,” he said.
He added the ongoing strike will have a negative effect on the Korean unit's productivity index, which will be evaluated by its parent company.
“The production contract will end in September and we do not know when the negotiations for renewal will begin. But if the union continues to strike, the productivity index of the Korean unit will decline and consequently it will have difficulties in winning production contracts for new vehicles,” the spokesman said.
The Rogue SUV is Nissan's best-selling model. The Busan plant started production of the Rogue in August 2014 following an agreement signed between Renault Group and Nissan, and Renault Samsung in July 2012.
Renault Samsung suffered falling sales in 2018, selling 227,577 vehicles, down 17.8 percent year-on-year.