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Renault Samsung, union tentatively OK wage deal for 2019

(Yonhap)
(Yonhap)

Renault Samsung Motors Corp. said Friday it has reached a tentative agreement with its union over wages for last year as the automobile industry tries to cope with the coronavirus outbreak, the company said Friday.

Renault Samsung workers accepted a wage freeze and will be paid cash bonuses of 8.88 million won ($7,320) per person for 2019, the company said in a statement.

"The company and the union have reached a consensus that they will have to make joint efforts to weather an industry-wide crisis sparked by COVID-19," the release said.

The union will vote this month on whether to approve the agreement date this month.

Renault Samsung and its 1,700-strong union have held 19 rounds of wage negotiations since September last year. Union workers held a two-week partial strike in January, causing production losses of about 10,400 vehicles worth about 200 billion won.

To avoid further losses from walkouts, the company partially shut down its sole plant in Busan, 453 kilometers south of Seoul, for the nighttime shift from Jan. 10. It was the second time that the company partially shut down the plant after it took a similar step for one day during wage negotiations with the labor union in May 2018.

In late January, the union suspended partial strikes undertaken in protest against the company's wage freeze proposal and voluntary retirement program, so they can resume talks in February.

The company has said it will be difficult to maintain the current workforce as the output volume of Nissan Motor Co.'s Rogue sport-utility vehicle is expected to fall sharply this year from last year's 60,000 units.

Renault Samsung produced about 100,000 Rogues at its local factory that were exported, under a manufacturing contract with Nissan. But Nissan cut its output allocation to the plant to 60,000 last year, citing output losses caused by labor strikes.

To offset the reduction in the Rogue production, Renault Samsung badly needs to secure export volume for the XM3 compact SUV, but the company is still in talks with its parent company Renault, and no decision has been made yet.

From January to March, Renault Samsung's sales plunged 28 percent to 28,390 units from 39,210 in the year-ago period.

The company's current lineup includes the SM3 compact, the all-electric SM3 Z.E. sedan, the QM3 small SUV, and the SM5, SM6 and SM7 sedans.

Renault S.A. has an 80-percent stake in Renault Samsung. (Yonhap)
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