Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Renault Samsung labor union surrenders to management
Renault Samsung employees manufacture vehicles at the company's plant in Busan, Wednesday. The company's union called off an all-out strike and reached a tentative agreement with management over last year's wage increases, and collective bargaining. Yonhap
By Nam Hyun-woo
By Nam Hyun-woo
The Renault Samsung union has ended up surrendering to management in its year-long battle over wages and other working conditions, withdrawing a strike threat and accepting the company's demands, according to industry analysts Thursday.
They said the union had to give in because many of its members were “tired of” its leaders' hardline approach, while concern is mounting over the survival of the company amid production losses and plunging sales.
According to company officials, union and management representatives reached a preliminary agreement over 2018 wages and collective bargaining around 10 p.m. Wednesday, just six-and-a-half hours after union leaders announced they would halt a walkout, and three hours after they began negotiations.
The company said union members will vote on the agreement today, adding it expects this will proceed smoothly.
Industry officials described this as the union surrendering, citing the new agreement is almost the same as a previous one it rejected, and even contains an additional clause on cooperation with management which the union opposed.
Last month, the union and management agreed on the payments of more than 11 million won in incentives to each employee, as well as new terms on base pay, relocations and hiring new employees.
However, the tentative agreement was voted down May 21, and union leaders called for a walkout, citing their opposition to the additional clause on cooperation.
Despite the decision to launch a strike, however, only 40 percent of union members participated in the week-long walkout. According to the firm, 69 percent of employees at its Busan plant worked normally Wednesday and had manufactured 121 vehicles as of 2 p.m.
Also, the management reacted strongly, saying it would impose a partial lockout at the plant, suspend the night shift and sue striking workers for financial damages unless they ended the strike and returned to work.
“It seems that many union members felt disappointed over the union leaders' excessive push for terms which have no direct relation to their wages and working conditions,” an industry official said. “Also, the members felt a prolonged labor dispute would harm the company's sustainability.”
The conflict has been mentioned as an imminent risk for Renault Samsung's sustainability, as the company is desperate to secure a new export model to be manufactured at the plant and keep it fully operational.
The plant has been relying on the Nissan Rogue, which accounted for nearly half of its total output. The manufacturing deal for the Rogue will end this year, but the company is yet to get a new model from the Renault, Nissan and Mitsubishi Alliance.
Renault Samsung is in competition with other alliance plants across the world to earn manufacturing orders, including the XM3 crossover for global sales, from headquarters, but the prolonged conflict has harmed the plant's productivity and attractiveness as a manufacturing base.
The company exported 38,216 vehicles from January to May this year, down 45.6 percent from 70,297 during the same period last year.
Also, the company has to regain domestic consumers' trust in the brand. Domestic sales in the first five months declined by 14.4 percent from the same period in 2018.