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(LEAD) Renault Samsung union enters strike as wage renegotiations falter

All News 19:28 June 05, 2019

(ATTN: CHANGES photo; ADDS company's response in 6th para, background in 12th para)

SEOUL, June 5 (Yonhap) -- Unionized workers at Renault Samsung Motors Corp. entered a "full-scale" strike after failing to narrow a gap in wage renegotiations, the union said Wednesday.

Renault Samsung and its union said they have had a series of meetings this week to discuss schedules and terms for renegotiations over wages and working conditions.

But they have failed to set the date for the renegotiations, dealing a further blow to the carmaker already suffering declining sales.

This week, the union demanded the company present a revised deal that contains better wages and working conditions before they begin renegotiations.

But the company didn't sweeten the agreement signed last month but rejected by its union workers, a union spokesman said.

"We will continue working-level talks with the union to start renegotiations. As most of the union members are not participating in the strike that began at 5:45 p.m., the company will have them continue to produce vehicles," the company said in a text message.

Renault Samsung plant in Busan (Yonhap)

Renault Samsung plant in Busan (Yonhap)

In the botched deal, Renault Samsung offered about 12 million won (US$10,000) per worker in bonuses for their contributions to the carmaker's performance in 2018 instead of raising the basic salary.

The company and the union began negotiations in June last year to sign a wage deal and collective agreement.

The company has wanted to maintain a certain output level at the plant by securing export models from its parent company, while the union is more focused on increasing wages and reducing labor intensity.

Renault Samsung workers staged 62 rounds of strikes from October through April 19, resulting in production losses of over 14,320 vehicles. Consequently, Renault Samsung's sales fell 36 percent to 67,158 vehicles in the January-May period from 104,097 units in the same period last year.

Moreover, the company temporarily halted operations at its only plant in Busan, 450 kilometers south of Seoul, several times due to its low utilization rate. In the latest suspension, the plant stopped operations on Friday, the company said.

Renault Samsung produced 210,000 vehicles in the Busan plant last year, but this year's output is expected to drop by half.

It is urgent for the company and the union to seal a wage and collective agreement deal in order to secure production volume for the SM3 and the XM3 for export to Europe, Renault Samsung CEO Dominique Signora said last month.

Renault Samsung produces the SM3 compact, the SM5 midsize sedan, the SM6 upper midsize sedan, the SM7 large sedan, the SM3 Z.E. all-electric car and the QM6 SUV. It also produces Nissan Motor Co.'s Rogue SUV on a manufacturing contract. The QM3 compact SUV is built in Spain and shipped to Korea.

Renault S.A. has an 80 percent stake in Renault Samsung.


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