Korean carmakers face prospect of strikes by workers

By 정주원
  • Published : Jul 14, 2014 - 10:14
  • Updated : Jul 14, 2014 - 10:15
South Korean carmakers are facing the prospect of renewed labor strife as they deal with unfavorable market conditions, industry sources said Monday.

Renault Samsung Motors Co. and GM Korea Co. said their union workers are planning walkouts and work disruptions after initial union-management talks failed to find middle ground on regular wages, bonuses and fringe benefits.

Renault Samsung, the local unit of French automaker Renault S.A., said its workers at the company's Busan plant will halt work for two hours in the afternoon to show their resolve in winning this year's labor talks.

The plant, with an annual capacity of 300,000 units, produced 130,000 cars last year, with the company forecasting 170,000 cars to roll off the assembly line in 2014.

The move marks the first walkout by any local carmaker this year, and may herald other disruptions down the line.

"Official talks that took place last Tuesday through Friday made little headway with unionists and management unable to find compromise on basic wage hikes, bonuses and vacation time issues," a company official said.

The union said that since it accepted a wage freeze for the past two years to help normalize the carmaker, it is only fair that management accepts a 119,700 won ($117) rise in monthly wages this time around. Unionists are also asking for a 200 percent bonus and assurances from the company to give workers full liberty to take days off for vacations as stipulated by law.

The Renault Samsung union had staged two-hour walkouts every day for two months during last year's wage negotiations.

The company said more time is needed to discuss the demands made by workers. Two-way talks are expected to resume Tuesday.

GM Korea, which makes cars under the Chevrolet badge, said Friday its workers voted to go on strike, although no details on how they plan to take such a step have been announced.

Union workers have demanded that bonuses and vacation support be included as part of their regular wage, but management has balked at the request.

Both Renault Samsung and GM Korea have done alright in the domestic market this year, although exports have fallen in the face of stiffer competition and moves by the company to readjust export strategies. GM's U.S. headquarters announced it will pull the Chevrolet brand from Europe, affecting output at its South Korean operations.

Both Hyundai Motor Co. and Kia Motors Corp., who have started talks with union workers this month, acknowledged that few gains were made due to differences surrounding the basic wage controversy.

Hyundai and Kia, South Korea's two largest carmakers, have stressed that this year is important because it has introduced new models that will help it regain market share from rivals around the world. Hyundai released its completely redone Genesis premium sedan and Sonata midsize cars, while Kia unveiled the Carnival minivan and will show off its new Sorento SUV.

Both companies have raised concerns that besides the stiff competition, unfavorable exchange rates that make locally made cars more expensive abroad is affecting the bottom line. (Yonhap)