Former Renault Samsung Vice President Lee Ki-in handwrote a letter on Friday to all the employees titled “Leaving the Busan plant.” “Our plant does not belong to the headquarters in Korea but is a mere affiliate that is part of a foreign company, and that such a current level of instability can only have detrimental impact on the future of workers and the company,” Lee wrote. His message intends to call on the employees to realize a situation that Renault Group may withdraw from its business in Korea if conflicts between labor and management are left unaddressed.
The feud between labor and management at Renault Samsung has never been longer. Even Lee, a foundation member who has worked for the past 26 years, had no option but to resign due to a heavy responsibility on his shoulders. Renault Samsung’s labor union has gone on strike partially for a total of 234 hours on 58 occasions since last October, leading to an expected loss of 240 billion won to sales.
Concerned of the prolonged strikes and the following production disruption, Japanese carmaker Nissan recently announced to reduce commissioned quantities to Renault Samsung of the Nissan Rogue, a compact crossover, from 100,000 to 60,000 units. It has been reported that the Renault headquarters consider assigning new car quantities, which are to be exported to the European market, to factories in Spain, not to those in Korea. Furthermore, the company has decided to shut down its plant in Busan for five days at the end of the month.
Under such circumstances, however, the labor union stays firm by laying out another proposal that personnel reshuffling and other issues be determined by labor-management consent, added to a pay raise. In the meanwhile, the union has prepared for membership in the Korean Confederation of Trade Unions to strengthen their posture. Even though it can invite a closing of the plant going beyond the shutdown, the labor union seems to lose sense of reality. Renault Samsung was the only automaker in Korea that failed to reach agreement on pays and collective bargaining last year.
With the labor-management conflict prolonged, subcontractors in Busan and South Gyeongsang Province have been driven to the end of the cliff and a growing number of subcontractors have shortened work hours or suspended operation since the delivery quantity reduced by up to 40 percent. Renault Samsung’s labor union has to listen to the voice of the former vice president saying that resolving the current situation is the only way to ensure jobs and future of the automaker and its subcontractors. It the labor conflicts continue, Renault Samsung could follow into the steps of GM Korea, which had closed down its Gunsan plant in May last year.