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Nissan Rogue production hit hard by strikes in Busan

Publication Date : 12-08-2014

 

The Korean production of the Nissan Rogue at Renault Samsung Motors’ Busan plant is expected to be hit hard by the labour union’s partial strikes that started last week.

“Even now Nissan is idling some Japanese plants. If the Korean situation gets worse, there would be no reason for the carmaker to continue to make cars in Korea,” said a Renault Samsung official on condition of anonymity.

According to the Korean unit of the French auto giant Renault Group, the carmaker started rolling out the Rogue crossover at its production plant in Busan Monday.

Under a new deal between strategic partners Renault and Nissan, the Korean carmaker will be producing some 80,000 vehicles per year for export to the North American market.

The deal, the company said, would bring 600 billion won (US$580 million) worth of sales for auto suppliers in Busan.

But the much-awaited Rogue production is now expected to face a setback as unionised workers are threatening to extend their partial strikes following a combined 16-hour walkout last week.

“If the management doesn’t accept our proposal, there will be no more talks,” the union said Monday in a statement, hinting at staging a general strike depending on the ongoing talks.

Along with wage hikes, the Renault Samsung union is demanding promotion of some manager-level factory workers as a prerequisite for face-to-face negotiations.

But the management has refused the union’s proposal, saying the company had decided to suspend promotions earlier this year due to a possible increase in costs and tepid company performance.

“The union is asking to discuss personnel changes with them,” said the company official. “But that is for the management to decide, and not with the union.”

Amid the escalating tension between the union and management, the carmaker suffered production losses of some 800 vehicles worth 17 billion won last week.

If workers go on strike as they pledged this week, another production cut of 1,000 vehicles worth 20 billion won would be unavoidable, the company predicted.

The strike threat is also expected to adversely affect Renault Samsung’s recent sales momentum following years of sluggish sales.

Largely driven by two new models ― the QM3 crossover and the diesel-powered SM5 sedan ― its car sales soared 22.6 per cent to 12,367 vehicles in July from a year ago.

 

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