Renault's Korean unit to shed jobs as sales slump
SEOUL (Reuters) -- The South Korean unit of French carmaker Renault said on Friday it will launch a voluntary redundancy program, its first ever, as it grapples with slumping sales both at home and abroad.
Renault Samsung did not disclose a target for work force reductions but a media report said the scheme may cut hundreds of jobs. The company said 4,500 employees are eligible for the program, while about 1,000 design and research staff are excluded.
Renault Samsung joins the South Korean unit of General Motors Co. in implementing voluntary redundancies, the preferred method used by companies to cut personnel costs in South Korea, where layoffs are generally frowned upon.
Carmakers in Asia's fourth biggest-economy are bearing the brunt of a global economic slowdown that is hurting demand.
About 130 managers at GM Korea applied for the scheme, a media report said. A GM Korea spokeswoman declined to disclose the number of applicants.
"Conditions remain difficult, so we came up with revival measures including voluntary retirements to slash costs," a Renault Samsung spokeswoman said.
This marks Renault Samsung's first voluntary retirement program since its inception in 2000. Applications will be closed on Sept. 7.
Renault Samsung also rejected speculation that there may be additional job restructuring if the applications fall short of expectations.
Renault Samsung has shown the worst sales performance this year among South Korean carmakers, with a combined slump of 34 percent in its home and overseas markets in the first seven months of 2012 from a year earlier, forcing the carmaker to cut production at its domestic plant.
Last month, the company said that its Busan factory is expected to build about 180,000 vehicles this year out of a 300,000 capacity.
Renault-Nissan chief Carlos Ghosn last month announced a plan to produce Nissan Rogue vehicles at the plant from 2014 to boost its utilization rate. The factory already builds some Nissan-badged cars such as the Sunny midsize and Almera compact models bound for markets such as Russia and the Middle East alongside Renault-branded vehicles for China, Europe and other markets.
Global sales at GM Korea, one of GM's major production bases in Asia, fell 2.1 percent in the January to July period from a year earlier.
South Korea's top automaker Hyundai Motor and second-ranked affiliate Kia Motors saw their sales decline in the domestic market this year, although the falls were offset by strong overseas sales.
Hyundai Motor, which with Kia Motors ranks fifth in global sales, has active labor unions and has not recently implemented any major voluntary redundancy programs.
Renault-Samsung was created in 2000 when Renault took a majority stake in the former Samsung Group carmaking unit.
Automotive News Europe contributed to this reportContact Automotive News