[Asia Economy Reporter Kiho Sung] Jos? Vicente de los Mozos, Vice Chairman of the French Renault Group, the second-in-command, visited the Busan plant of Renault Samsung Motors on the 29th. Vice Chairman de los Mozos is in charge of manufacturing at Renault Group and holds the key to the allocation of export volumes of the new XM3 model to Europe. On the same day, he also held a meeting with Oh Keo-don, Mayor of Busan Metropolitan City, marking a critical turning point in the long-standing labor-management conflict at Renault Samsung Motors, which has extended beyond a year due to strikes.
On the morning of the visit, Vice Chairman de los Mozos received a status report and toured the production site at the Busan plant of Renault Samsung Motors. In the afternoon, a private meeting was held between him and Mayor Oh at the Busan plant. It is observed that the discussion mainly focused on securing production volumes and normalizing operations at the Busan plant. Previously, in August last year, Mayor Oh visited Renault Group’s headquarters in Paris to request a new allocation of production volumes to replace the Nissan Rogue, whose production is scheduled to end this year.
As the head of manufacturing at Renault Group, Vice Chairman de los Mozos can influence critical issues affecting the operation of the Busan plant, including securing export volumes of the new XM3 model to Europe.
The key issue is labor relations. Renault Samsung Motors lifted the partial plant closure that began on the 10th on the 21st, and all employees have returned to work to normalize plant operations. On the first day after lifting the closure, the 23rd, only integrated daytime shifts were conducted for work preparation, and from the 29th, after the holiday, normal two-shift operations (day and night) resumed. Meanwhile, the Renault Samsung Motors labor union has agreed to hold intensive collective bargaining sessions for the 2019 wage and labor agreement from the 4th to the 7th of next month after preliminary negotiation meetings.
Industry insiders view the visit of Vice Chairman de los Mozos, who decides on production volume allocation, as a reason for the temporary truce between labor and management.
Previously, the labor union conducted announced and selective strikes starting December 20th last year, citing the breakdown of wage and labor agreement negotiations. Although over 70% of union members reported to work normally, production volume did not reach even 20%. In response, the company initiated a partial plant closure from the 10th, eliminating night shifts and implementing integrated daytime shifts for non-union members and union members who did not participate in the strike. Subsequently, labor and management reached a dramatic agreement to resume normal operations on the 21st.
Due to the wage and labor agreement issues, Renault Samsung Motors has faced nearly 500 hours of strikes over the past two years, threatening the company’s survival. Additionally, the Busan plant must secure new production volumes as the contract for the Nissan Rogue, which accounts for half of the plant’s production, ends in March.
Renault headquarters considers the labor dispute at the Busan plant an important factor in deciding production volume allocation. During his visit in February last year, Vice Chairman de los Mozos warned, "The production costs at the Busan plant are already the highest among Renault Group plants," adding, "If production costs increase further, we will lose competitiveness in production volume allocation."
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