March 04, 2021 12:03
Renault Samsung is minded to halt night shifts from next week after recording its first loss in 11 years last year and losing the bulk of its production orders.
The automaker already started taking applications for early retirement last month, and around 100 workers have applied so far. If not enough workers sign up voluntarily, the company is expected to furlough its 4,200 employees on rotation.
The automaker's production plant in Busan manufactured 260,000 cars a year until 2017. But last year it made just 110,000, causing Renault Samsung a W70 billion deficit. Its production target for this year is only 100,000 vehicles.
The crisis started in September 2019, when the production contract for the mid-sized Nissan Rogue SUV ended. It accounted for half of the Busan plant's annual output. The company put off allocating another model for production there when workers there went on strike in 2019 and 2020.
Renault headquarters in France finally assigned the Busan plant the small XM3 SUV for export to Europe, but production volume is only 30 percent of the Rogue's.
The French automaker recently announced restructuring plans to reduce its annual global output from four million to 3.1 million cars. It singled out the Busan plant as one of its least profitable overseas operations.
There are rumors that Renault is considering pulling out of Korea altogether, raising fears that the country’s other foreign-owned automakers could follow suit.
GM suffered cumulative losses of around W3 trillion over the last seven years, and Mahindra, which owns Ssangyong, suffered W1.8 trillion in losses over the last 13 years. The three employ around 300,000 people in Korea.
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