Labor dispute at Renault Samsung could finally be nearing the end

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Labor dispute at Renault Samsung could finally be nearing the end

A resolution to Renault Samsung Motors’ monthslong dispute with its labor union may be in sight, as its workers appear to be reaching a consensus to help the automaker gain an edge from selling already-well-received XM3 SUVs.

On Thursday afternoon, the management and labor union re-entered negotiations for wage levels and working conditions for last year.

The Korean unit of Boulogne-Billancourt, France-based Renault Group has been in a conflict with its workers since last year.

The continuing conflict has been focused on wage increases. For 2019, the union has been asking for an 8.01 percent increase in base pay, a bonus of 4 million won ($3,400) and a promise for new hires.

The unionized workers have been comparing their wage levels to those of four other domestic automakers in the country, saying Renault Samsung Motors has refused to pay higher wages despite making net profits in some years.

Renault Samsung Motors increased base pay by a little more than 240,000 won between 2013 and 2019, according to a Thursday newsletter from the union.

During the same period, Hyundai Motor and Kia Motors hiked wages by more than 450,000 won each. And despite years of continuing losses, GM Korea and SsangYong Motor both managed to raise their workers’ wages by more than 350,000 won.

Still, Renault Samsung’s management is in a comparatively unique position, having to rely on its French parent for contract manufacturing orders and financial support.

Workers are paid the most competitive wages among all Renault Group units, a spokesperson for the automaker said, including its French headquarters.

Renault Samsung Motors has been refusing to raise its base wage level amid losses due to weak sales and the loss of contract production orders.

In 2019, Renault Samsung Motors sold a total of 90,591 cars, down 34 percent from 137,208 posted a year earlier.

Following the end of its manufacturing contract with Nissan for Rogue SUVs last year, Renault Samsung has been asking Renault Group to assign some orders to be processed at the Busan factory.

But the spokesperson said the French parent has been reluctant to give out any, as higher wages for Busan plant workers could threaten the cost competitiveness of units produced at the Korean plant.

That gaping distance between the two sides’ perspectives has for months hampered any chances of finding a middle ground. But the situation recently took a drastic turn, as the company appears to be staging a significant comeback with the XM3 SUV that launched Monday.

The automaker already logged 8,542 orders for the compact SUV during presales, and the model has already received positive reviews.

As the SUV’s popularity and potential profitability have become apparent, Renault Samsung Motors workers have been coming to an agreement that they should be working together to ensure a smooth rollout of the XM3.

Many within the union are indicating that by giving in on some of their demands for higher wages in 2019, the automaker may be able to attract contract production orders from the French parent company this year as well.

Hard-line labor actions have also been losing popularity among the union-represented workers, with the participation rate for partial strikes falling as low as 33 percent in December.

That waning enthusiasm for aggressive moves has also weakened the argument of some union members who have been pushing to register the labor union under the Korean Confederation of Trade Unions, one of the two major umbrella labor groups in Korea.

The union announced Wednesday that it will postpone its internal discussion on whether to join the umbrella group, after a number of union leaders objected to the move through a statement earlier in the day.

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