Renault Samsung may have to cut workforce

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Renault Samsung may have to cut workforce

Renault Samsung Motors is headed for a human resources overhaul as production falls at the company’s factory in Busan.

According to industry sources Monday, the automaker opened up a meeting with its labor union last week to deliver a plan to reduce the Busan factory’s production rate from 60 units per hour to 45 from October in line with order declines. With the reduced production, the company is also considering downsizing production staff by roughly 20 percent. Currently, there are roughly 1,800 production workers at the plant.

“It is true that our production is declining … and we are feeling the need to downsize the workforce,” a spokesperson from Renault Samsung Motors said. “But we are not sure of when and how that will take place as we are still in discussions with labor.”

The spokesperson said taking voluntary retirement or making employees go on mandated leave are both considered.

The major reason for the production decline at the Busan factory is the decision by Nissan to reduce its Rogue SUV orders from 100,000 units to 60,000 in March. Rogue production had accounted for roughly half of last year’s workload at the Busan factory.

Nissan cited concerns in quality and stable delivery as its grounds for the decision, as Renault’s Korean subsidiary fell in dispute with its labor union over wages.

According to data from the Korea Automobile Manufacturers Association, Renault Samsung Motors produced 98,800 cars this year through July, a 29.1 percent drop year-on-year.

While the Korean unit is striving to win more orders for the factory from its French headquarters, the headquarters maintains that the wage deal with the labor union needs to be closed first.

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