Pay Conflicts in Romania Might Force Dacia to Shift Production in Morocco image

Renault’s Dacia unit announced that it might transfer production to Morocco if solution is not found for pay conflicts in Romania.

Last month workers at Dacia’s Pitesti plant stopped production for two days, in pursuit of a 40% salary increase, instead of the 9% offered by the company. The strike caused Dacia, Romania’s largest exporter, a loss of 20 million euro ($26.1 million). Dacia, which exports almost 90% of its output, sold 360,000 vehicles globally in 2012, an increase of 4.8% from 2011.

“If this protest will not end up reasonably and in a mutually beneficial manner and if employees will continue with unrealistic demands, there’s a greater probability to transfer an important part of production to Morocco. The advantage of the plants in Morocco is that an employee earns only 54% of a Romanian employee’s salary,” Automobile Dacia Vice-President Constantin Stroe said.

Last year the average monthly salary at Dacia was 3,965 lei ($1,200) compared with 2,100 lei the national average. Today, April 11th, the labor unions are expected to unveil further action plans. According to ACEA, In February Dacia sales in Europe increased 15.4% to 20,423 units, while Renault sales fell 14.8% to 58,423 units. In January and February Dacia’s sales increased 11.7% to 41,043 units and Renault dropped 12.7% to 115,289 units.