The management and labor union of Renault Samsung Motors Corp. tentatively reached an agreement on wages and other work terms for this year, raising prospects for normalization at the Busan plant that has been running at 75 percent of its full capacity amid labor disputes since last fall.

The South Korean unit of French automaker Renault S.A. said Thursday the two parties struck an agreement after 40 hours of non-stop discussions. The collective bargaining terms would be put to a vote by unionized workers on May 21. The settlement is expected to pass as a growing number of workers have become fretful about their livelihood amid speculation about the French carmaker packing out.

The wage talks have dragged on since June last year with the union staging 62 partial strikes to push its demands that led the global alliance to realign production and cancel work orders to the Busan factory.

Under the new wage terms, the base pay would be held steady but include a 1 million won ($840) bonus and a 35,000 won raise in monthly meal allowances. Incentives would total 9.76 million won, with 50 percent handed out as productivity incentive payment.

Regarding the controversial work rearrangement schedule, an agreement was reached to improve the process so that it meets the interests of both parties. The union had demanded for a consensus on decisions regarding the rearrangement of staff positions, which are currently settled by consultation. But the management dismissed the proposal, saying it runs the risk of undermining management rights and hurting productivity.

The two sides agreed to hold a meeting every quarter at the request of either party regarding outsourcing or work rearrangements. Lunch time was extended to 60 minutes from 45 minutes. The company would also make 60 new hires and activate a committee to improve working conditions.

Dwindling auto sales and frequent labor disputes have caused Renault Samsung’s parent company to slash the order of the Nissan Rogue, a mainstay of the Busan plant, to 60,000 units from last year’s 100,000. Renault also decided not to extend its contract for Rogue once it expires in September, which would deal a heavy blow to the Korean unit as the model accounts for nearly half of its annual turnout. The parent company has yet to decide a replacement export model.

By Lee Jong-hyuk and Kim Hyo-jin

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