Renault Samsung floats idea of 3-week production suspension amid wage talks

2020.09.18 09:48:06

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Renault Samsung Motors Co., a South Korean carmaker under French auto giant Renault S.A., is mulling to unplug its main Busan factory for more than three weeks amid poor sales, a move the union suspects is motivated more as a pressure amid wage negotiation.

The company has notified its factory workers that it will shut down from September 25 to October 18 to adjust output on the back of increasing unsold vehicles amid Covid-19, the labor union said on Thursday.

The unionized workers complained that the shutdown in the middle of a wage negotiation is an unfair tactic aimed at cutting wages and improving company profits. The company should not halt production as it has just released new XM3 model, they argued.

“Wages will be cut during the shutdown period and the management should take full responsibility,” the labor union said, adding that it will hold wage talks even while the plant suspends operation.

The company, however, said that nothing has been confirmed yet.

“Production suspension may be necessary to manage inventories efficiently while maintaining the current double shift system because of the poor domestic sales in July and August,” an official from the management said.

The labor union and management held the sixth negotiation on Thursday but failed to make any progress, according to sources.

Sales of Renault Samsung Motor plunged 41.7 percent in August against a year ago to 7,570 units, with 6,104 units in Korea and 1,466 units overseas. Domestic sales shrank 21.5 percent and exports tumbled 71.9 percent.

By Pulse

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