Labor Union Opposed to Restructuring

Renault Samsung Motors Corp. has begun to receive applications for early retirement as part of a restructuring program.

Renault Samsung Motors Corp., South Korean unit of French automaker Renault S.A., has begun to receive applications for early retirement.

The company receives applications for voluntary early retirement from senior-level employees and executives at the manufacturing department from Sept. 5 to 27. Those who apply for the program will be offered a severance pay and up to 36 months of monthly salary for compensation.

Renault Samsung has decided to implement the early retirement program to reduce hourly production due to a decline in production volume. The company needs to reduce the units per hour (UPH) at the Busan plant from 60 to 45 as Nissan Motor Co. has decided to end contract manufacturing of the Rogue SUV in South Korea next month. Therefore, Renault Samsung has no choice but to restructure its workforce and is expected to lay out 400 employees.

The labor union has strongly opposed the decision. A union member said, “The company’s restructuring is not a simple restructuring but a way to secure profitability by cutting costs. If the management does not scrap the restructuring plan, the labor union will fight back by fair means or foul.”

Renault Samsung produced 98,800 cars from January to July this year, a drop of 29.1 percent from a year earlier. This is due to the drastic cut in the output volume of the Nissan Rogue which has been manufactured at the Busan plant. In fact, Nissan decreased the production volume from 100,000 units to 60,000 units a year in March.

Currently, Renault Samsung is struggling to secure manufacturing of other car models for exports from Renault S.A. in France, but the parent company has reportedly said that it will allocate manufacturing of follow-up export models only when labor-management relations are stabilized.

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