Renault’s Dacia Stops Production in Mioveni, Romania Due to Workers Protest image

Dacia, owned by French company Renault, stopped production at the Mioveni plant, Romania, yesterday, March 20th, as workers protested over pay issues.

Renault’s Dacia is Romania’s larger exporter and accounts for almost 3% of gross domestic product, with 90% of its output being sold abroad. In 2012 Dacia sold almost 360,000 vehicles worldwide, an increase of 4.8% from 2011.

“We’re negotiating on the collective work agreement,” Anca Oreviceanu, spokeswoman at Dacia, told Reuters. “We don’t know the impact on production yet.”

According to media reports, Dacia employees are protesting against pay issues, looking for a 25% pay increase. The average gross pay for the automaker’s workers was 3,700 lei ($1,100) in 2012, compared with the national average of 2,100 lei. Economy in Romania, which is the second poorest country in Europe, increased 0.3% in 2012 and analysts predict it will further increase by 1.5% this year.

On another matter, three labor unions agreed with Renault’s restructuring strategy, which enables the automaker to eliminate 7,500 jobs in France by 2016 through attrition, freeze wages this year and increase the number of weekly working hours from 32 to 35. These changes are expected to bring the company savings of 500 billion euro.