Tuesday, July 16, 2019
Imprudent Strike Threatening Survival of Renault Samsung Motors
Workers Normalize Plant, Ignoring Strike Decision
Imprudent Strike Threatening Survival of Renault Samsung Motors
  • By Jung Min-hee
  • June 6, 2019, 08:54
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Despite the union leaders' decision to enter an all-out strike on June 5, workers at Renault Samsung Motors normalized the operation of the company's plant in Busan.

Despite the union leaders' call for an all-out strike on June 5, workers at Renault Samsung Motors normalized the operation of the company's plant in Busan.

The labor union of the struggling automaker declared a full-scale strike after its wage negotiations with the management collapsed. 

Yet many unionized workers refused to follow the union's brinkmanship tactics and chose to work on the production lines as usual.

The union's strike decision has put the company on the edge of a precipice.

The company is scheduled to produce the Nissan Rogue until the end of this year and has to persuade its parent company, Renault Group in France, to give another model for export to Europe. Until recently, the XM3, which is slated to be released in the second half of this year in South Korea, was mentioned as the substitute to be produced in Renault Samsung’s Busan plant, but the facilities of Renault in Spain have emerged as an alternative in the wake of the labor-management conflict at Renault Samsung.

The company’s survival cannot be guaranteed, even if the conflict disappears, once it fails to obtain the new model. “Renault is going to entrust the production of the new vehicle to its most productive plant,” said the company, adding, “The all-out strike in Busan is of no help at all.”

Last month, Renault Samsung sold 6,130 and 8,098 cars inside and outside South Korea, respectively. Renault Samsung cannot achieve the economy of scale without the new model.

The declaration of the strike is likely to negatively affect the labor-management relations of the other South Korean automakers. Negotiations recently started in Hyundai Motor Group and GM Korea and noises are being heard already.