Renault Samsung shuts down plant amid labor strike

The labor-management feud escalated Tuesday within Renault Samsung, the South Korean unit of the French carmaker, as the company temporarily shut down its plant amid continued union strikes for a wage hike, officials said Tuesday.

As the heightened discord has come amid sluggish sales and a prolonged global semiconductor shortage, CEO Dominique Signora sent out a warning signal to union workers, assuming a hard-line stance on the situation.

“We are in urgent need to cut down costs during this crisis as the company’s overall vehicle sales hit the lowest level in 16 years,” the CEO was quoted as saying through a message sent out to staffers, alluding to the possibility of restructuring.

The top official also warned that the ongoing chip shortage that is weighing upon the car industry will continue to disturb the company for several more months.

Signora’s words came as the management shut down the company’s sole plant in Busan earlier in the morning, in response to the labor union’s strike that extended for three consecutive working days from Friday.

“Assembly line workers who are taking part in the strike were blocked from walking into the plant site, while those who stayed out of it were allowed in,” an official of the company said.

The carmaker has for months been disturbed by the stalled wage negotiations, with unionists calling for a hike amid the COVID-19 pandemic and the management held back by sluggish sales and chip supply shortage.

From January to April this year, the company’s sales dipped to 31,412 vehicles, down 24 percent from a year earlier, mainly due to the lack of eye-catching new models.

Its business slowdown was more conspicuous in the domestic sector.

The number of vehicles sold in April came to 5,466 units here, contracting 50.4 percent from a year earlier. It was the 87.2 percent on-year expansion of the export front which partly offset such losses.

In January, Renault Samsung kicked off an emergency management system, after logging an operating loss of 70 billion won ($62.5 million) in 2019 for the first time in eight years. The plan involved halving the number of executives and their payroll, as well as a voluntary retirement program.

The carmaker’s current product lineup available in the market includes the all-electric SM3 Z.E. sedan, the SM6 sedan, the XM3 SUV and the QM6 SUV.

By Bae Hyun-jung (tellme@heraldcorp.com)