Renault Samsung Motors and its labor union once again failed to reach a consensus on 2018 wages after negotiations fell through for a 14th time on Tuesday. Renault Samsung is the only domestic automaker that has still not clinched a wage deal for last year. A source from the automaker said the Tuesday talks lasted for about an hour and a half after the meeting began at 2 p.m. at Renault Samsung’s Busan factory, but ended in vain.
The major issue of disagreement is over whether to raise the base pay.
The labor union has been requesting a 100,667 won ($89.51) raise in base pay. The company has refused, citing bad timing, and offered incentives if the base pay is maintained instead.
The wage deal is very important for both the company and the labor union, as it comes at a crucial time.
While Renault Samsung’s Busan factory has been producing Nissan’s Rogue compact crossover on consignment, the contract ends in September.
The Korean unit of Renault needs to negotiate with the French headquarters to win follow-up models to produce in Busan. As Rogue production accounts for nearly half the workload at the Busan factory, it could be seriously harmed if the deal falls through and may even end up following in the footsteps of GM Korea’s Gunsan factory in North Jeolla, which closed last year.
The company claims raising the base pay at this time would negatively affect negotiations with the headquarters.
The labor union, however, responded to the company with partial strikes. From October last year through last month, the labor union has gone on strike 28 times at the Busan factory. The labor union claims it deserves a base pay raise considering its wage is about 85 percent that of workers at Hyundai Motor factories and its productivity has been high.
In response to the strikes, Jose Vicente de Los Mozos Obispo, Deputy Alliance Executive Vice President, Manufacturing & Supply Chain at Renault, sent a video message to employees at the Korean unit earlier this month, warning the Renault-Nissan-Mitsubishi Alliance cannot assign new models to the factory if the strikes continue. Renault considers labor cost, production cost and supply stability when allocating new models to factories.
The two parties have yet to hammer out their differences in the negotiations that began in June last year.
The company and the labor union will have another round of negotiations soon, though the exact date was not released Tuesday.
Renault Samsung is in a hurry to finalize the deal as it is running out of time to win new models for the Busan factory before September. The factory needs several months of preparation to adjust production lines to produce a new model.
