September 10, 2012 / 2:42 AM / 6 years ago

Renault's Korean unit to cut 15 percent of jobs on dismal sales

SEOUL (Reuters) - The South Korean unit of French carmaker Renault (RENA.PA) plans to cut about 15 percent of its workforce under a “voluntary retirement programme” in an effort to cut costs, the company said on Monday.

Renault Samsung is grappling with falling sales both in South Korea and abroad brought on by a slowing global economy and a limited product line-up.

The company denied media reports about more job cuts and Renault’s transfer of the unit to alliance partner Nissan Motor (7201.T).

Renault Samsung said about 800 workers out of a total 5,500, will leave the company under its voluntary retirement programs, the preferred method used by companies to cut personnel costs in South Korea where layoffs are generally frowned upon.

Renault Samsung’s total sales slumped 40.4 percent in the first eight months of this year, with domestic sales tanking 52 percent and overseas shipments slumping 32 percent.

A spokeswoman at Renault Samsung denied a media report that Renault may hand over control of its South Korean unit to alliance partner Nissan Motors, saying it is “groundless.”

Renault in 2000 took a majority stake in the former Samsung Group car-making unit and now holds an 80 percent stake.

The report by Joongang Ilbo last week said Renault-Nissan chief Carlos Ghosn ordered the alliance to start working on the transfer in 2014 when Nissan plans to produce Rogue vehicles at Renault’s South Korean factory.

Reporting by Hyunjoo Jin; Editing by Matt Driskill

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