After six months, RSM and union reps reach deal

In some good news for Renault Samsung Motors, the struggling company has reached a wage agreement with representatives of its labor union.

According to RSM, it reached the agreement with the union on late Monday night after 12 rounds of negotiations at its plant in Busan, 45 days after the union authorized actions against the company.

The Korean unit of French automaker Renault said both sides acknowledged that the company is in a difficult situation. The agreement freezes wages, maintains welfare measures, stabilizes the two-shift system, provides bonuses for reaching the agreement, pays incentives of 500,000 won ($438) to 1 million won to employees when the company reaches targets and earmarks 10 billion won to upgrade efficiency at the Busan plant.

Union members are expected to vote on the agreement Friday.

“The agreement was reached under a vision that both sides want to bounce back from the difficult situation,” said an RSM official. “If the agreement is approved in the union’s vote, we will finalize the process quickly.”

Management and the union began negotiations six months ago, and the union conducted partial strikes six times, totaling 48 hours of production time.

One controversial issue was management’s proposal for employees to use vacation time when the factory is not operating. While management explained this was a move to maintain efficiency and reduce costs, the union saw it as undermining employees’ freedom to use their vacation time when they want. Management first proposed that 22 days of vacation be used under the condition, but it later agreed to 18 days.

RSM sold 58,705 units worldwide in this first half of the year, off 29.3 percent from a year ago. Domestic sales plunged 14.2 percent year-on-year and dropped the nation’s smallest automaker behind Ssangyong Motor.

RSM this week came out with aggressive promotion offering people who bought a Hyundai Avante, Kia K3 or Chevrolet Cruze after April 1 a chance to trade in their used car for a new SM3.

RSM said it has budgeted 3 million won for the program.

The price difference between new cars and cars that are 3 months old is about 3 million won.

BY Joo kyung-don [kjoo@joongang.co.kr]