Renault Samsung halts production after strikes

Renault Samsung Motors temporarily stopped operations at its Busan factory on Monday amid a lengthening dispute with its labor union over wages and working conditions.

The Korean unit of the French automaker is suspending the operation of its only plant in Korea on Monday and today. The factory will resume operations on Thursday, as Labor Day falls tomorrow, a company spokesperson said.

“We are closing our plant on Monday and Tuesday as we had to readjust and lower our production target for this year to 160,000 units from 200,000,” he said.

As of Monday, the Busan-based automaker’s labor union has gone on 62 strikes since last October for a total of 250 hours, causing production losses of 14,320 vehicles, according to the automaker. The dispute has continued well past the March 8 deadline set for the conclusion of negotiations.

As the operating rate for the Busan factory fell by 20 percent due to continuing strikes, Renault Samsung Motors said it has suffered around 280.6 billion won ($242 million) in losses.

The union has called for the company to follow the minimum wage law, claiming that the required rate is not being paid.

It also demands management improve working conditions, adding that mismanagement has led to difficulties and mass layoffs.

The company argued that cost increases could harm its competitiveness. A spokesperson from the automaker said workers at the Busan factory are already paid most competitively among all Renault Group employees.

The union also asked for the right to participate in the human resources decision-making process. However, Renault Samsung Motors CEO Dominique Signora said in a meeting with Busan Mayor Oh Keo-don on April 18 that the automaker will not accept the union’s demand regarding personnel decisions.

The union and management will meet again Thursday to decide the timeline for future negotiations.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]