Renault executive visits conflict-ridden Busan plant

A senior executive from Renault Group visited the South Korean unit’s manufacturing plant in Busan on Wednesday, amid deepening labor and management conflict and falling productivity at Renault Samsung Motors.

According to the South Korean unit of the French automotive group, Renault Group’s Deputy Alliance Executive Vice President Jose Vicente de los Mozos visited the Busan plant and held a meeting with manager-level employees. The company said the trip was part of his tour of Renault Group facilities around the world.

His visit comes less than a year after visiting the same plant when Renault Samsung labor had been striking for higher pay. 

During that visit, in February last year, he had expressed his concern that if production costs there increased, the Korean unit would have no new model to produce, after production of Nissan’s Rogue SUV ended in September last year. 

“If the strike continues, the operating hours of the plant will go down and the trust you have built up will fall. Under these circumstances, it is hard for us to have a discussion with Renault Samsung on the follow-up model to the Rogue,” he had said in February last year.

However, the Renault Samsung labor union continued with the strike demanding an 8.01 percent raise in the base wage. The company rejected the call, citing the termination of Rogue production there, and saying that both sides must share the burden arising from the worsening business environment.

The strike continued until June. Toward the end of the year, the management and the labor union butted heads again over pay. Workers there have been on strike since Dec. 20, which led to a partial lockout until last week’s Lunar New Year holiday. The two sides are to hold talks from Feb. 4-7.

Market insiders said De los Mozos, who also heads the group’s manufacturing and supply chain, is expected to discuss the production allotment of the XM3 crossover for export at the Busan plant, which is still being delayed due to the continued strike. 

Industry experts say Renault Samsung needs to secure export volume for the XM3, as it needs to offset the loss of Rogue production. 

“But even if we secure the export volume for XM3 production now, it would be hard to pull up the production amount within this year, since the earliest delivery to the European market would be next year,” a Renault Samsung official told The Korea Herald. 

With Nissan Rogue production ending and frequent halts in production line due to labor strikes, Renault Samsung recorded a 34 percent fall in sales to 90,591 units last year, from 137,208 units in 2018. 

By Kim Da-sol (ddd@heraldcorp.com)