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| Renault Group headquarters in France / Courtesy of Renault Samsung |
By Nam Hyun-woo
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| Renault Group Executive Vice President Jose Vicente de los Mozos / Courtesy of Renault Samsung |
According to union officials, the executive visited Renault Samsung's plant in Busan Wednesday and Thursday, and had meetings with executives and union leaders.
The management and the union did not reveal the content of their respective meetings with de los Mozos, and Renault Samsung spokespersons said he visits Renault Group's affiliates and plants around the world every February, thus this was a routine visit.
Given the current situation at Renault Samsung, however, it is assumed that the executive might have expressed serious concerns on the protracted collective bargaining negotiation between the company and the union, and faltering profitability of the company.
Earlier this month, he sent a video message to employees and executives of Renault Samsung and expressed Renault Group's concerns over the Busan plant's high production costs, saying "Renault Samsung pledged to improve its competitiveness in order to secure production volume of the new Arkana but the plant is not fulfilling its promises and urgent improvements are required." The Arkana is branded as the XM3 in Korea.
Then, he said the group expects the Busan plant to produce the Arkana at a level of production costs similar to the Spanish plant which is building the Captur, a move being interpreted as indirect pressure to cut labor costs.
According to Renault Samsung, Renault Group is gauging the profitability of its plants around the world with an index comprised of quality, cost, time and productivity. The Busan plant was No.1 among 19 Renault plants in 2018 but fell to No.10 last year. In terms of cost, the Busan plant was No.17 out of 19 plants.
While costs were increasing, the company's sales plunged to 114,630 vehicles last year, down 30 percent from 163,796 in 2019. Renault Samsung CEO Dominique Signora said recently the company logged an operating loss for the first time since 2012.
Despite the faltering sales, the company's management and union have been in a dispute over working conditions and wages.
The two sides held their sixth meeting on last year's collective bargaining Feb. 18, but failed to narrow their differences.
According to the union, Signora said during the meeting that the ongoing voluntary retirement program is aimed at reducing fixed costs by 25 percent and seeking to produce 100,000 vehicles this year, down from the company's initial goal of 157,000 vehicles.
Over the rumor that the company may operate the Busan plant with one shift starting next month, the company said it had not made such an order, but is considering it as a contingency.
In response, the union also showcased a hardline approach, saying there will be "no overtime or extra work" if the company runs the plant with one shift.
Along with working conditions, the two sides are locking horns over employees' wages. The union has been demanding management donate 1.2 billion won for the union's development, a 4.69 percent hike in base pay and a one-time incentive of 7 million won.
The two sides have yet to set the schedule for further negotiations.
