A Warning to Labor Union
"The manufacturing cost of Busan Plant is twice as high as that of Spain Plant," said Jose Vicente de los Mozos, vice chairman of Renault Group in charge of manufacturing and supply in a recent video message to employees of Busan Plant. “This issue needs to be addressed urgently.”
"When I visited the Busan plant in 2020, officials there promised to boost the plant’s competitiveness to secure production of the New Arkana (XM3) for exports to Europe," Mozos said. “I persuaded Renault Group's top management to outsource production of the New Arkana to Busan Plant. But the promise was not kept.”
Renault Group even unveiled Busan Plant’s manufacturing competitiveness. Busan Plant ranked 10th in production competitiveness among the 19 plants of Renault Group. In particular, it placed 17th among the 19 as of 2020 in terms of production cost, a major factor in production competitiveness.
"Busan Plant's production cost is twice the average of European plants, and furthermore, transportation costs should be added. I believe employees of Busan Plant are well aware that production in Korea is not reasonable," Mozos said. "Busan Plant should lower its production cost for the New Arkana to the level of the Spain Plant. Busan Plant has to fulfill this responsibility."
"A survival plan for Busan Plant is aimed at increasing the plant’s competitiveness, so we must push down the plant’s production cost," Mozos warned. "If this promise is not kept, we will find a new way." This is interpreted as a warning to Renault Samsung's labor union, which is set to stage a strike. This also suggested that Renault Group may consider withdrawing from the Korean market if a restructuring including a voluntary retirement program is not smoothly carried out.
Renault Samsung announced the survival plan in early 2021. The plan focuses on a 40 percent cut in the executive payroll, a 20 percent cut in wages for the remaining executives and voluntary retirements for all employees. The Renault Samsung labor union is taking steps to go on a strike, saying that they are against the incompetent management.