Renault Samsung Offers Employee Buyouts as Sales Sink

Renault Samsung launches its first-ever early retirement program for its employees amid plunging sales.

A spokesman tells WardsAuto the program is open to all staff except those who work in research and development and styling.

“We announced on our internal website that employees wishing to take advantage of this program may apply between Aug. 13 and Sept. 7,” the spokesman says. “The amount of retirement compensation will differ, depending on an employee’s length of service, with a maximum benefit of 24 months of pay.

“We have no employee reduction target for this program,” he adds.

While Renault Samsung’s dismal sales performance is part of the reason for the early retirement offer, the primary motivation is to reduce costs.

The auto maker reports its global sales plunged 33.9% in the year’s first seven months, with 93,919 deliveries compared with 142,023 year-ago. Domestic sales sank 43% to 36,654 units and exports tumbled 26.6% to 58,265.

The spokesman says deliveries are improving since July and are expected to get a boost shortly when updated versions of the SM5 midsize sedan and SM3 compact sedan are launched.

The early retirement program includes one-time payments to departing employees of 5 million won ($4,400) for each dependent of pre-college age. In Korea, high-school students must pay tuition and other educational fees and purchase their own books and supplies.

The Renault Samsung program is similar to one offered for two weeks in May to senior managers at GM Korea. That program provided up to two years’ pay and covered high-school tuition for the children of those who opted for early retirement.

GM Korea discloses neither its employee-reduction target nor how many workers took advantage of the program.