The Busan ultimatum

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The Busan ultimatum

Renault Samsung’s Busan plant was partially shut from Friday to minimize losses after 80 percent of its employees reported to work even after its labor union announced a full strike. The management decided to keep the factory open to the workers who wish to work instead of striking.

The union has been calling sporadic strikes after its wage negotiation broke down last month. The union has protested the wage freeze and enforcement of early retirement despite surpluses until last year. The union chose a guerilla strike due to poor support for a full strike. Workers complying with the strike chose not to work for a certain span of time so as to disturb the full assembly line. To ensure quality control, the management decided to deny entry of workers supporting the strike.

It is the second partial shutdown since June last year. The management closed the factory to some employees due to a protracted dispute over the 2018 wage deal. The union carried out 62 strikes from October 2018 to April last year. The strike continued after the Korean Confederation of Trade Unions (KCTU) took over the union leadership.

The Busan factory cannot afford more labor unrest. Sales losses from strikes have exceeded 450 billion won ($389 million) so far. Sales fell 22 percent last year. It has lost the orders for the Nissan Rogue SUV, which accounted for half of total output, and has yet to receive a follow-up model.

The French owner has a 79.9 percent stake in Renault Samsung. The head of manufacturing operations will be arriving in Korea later this month. The French carmaker has warned that it cannot further increase wages which are already among the highest among its subsidiaries. A factory worker of 25 years earns more than 80 million won a year. Renault could come with a stronger warning this time.
The management and employees are in the same boat. A company with inner problems cannot face fierce competition in the global market. No company can last if it has labor conflict. The Moon Jae-in administration must reexamine its pro-union policy against waning productivity in Korean manufacturing.

JoongAng Ilbo, Jan. 13, Page 30
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