Renault Threatens to Move Work from Romania to Morocco

Renault SA's Dacia unit says that if workers at its assembly plant in Mioveni, Romania, persist in demanding a 40% wage increase, the company could shift a significant portion of the facility's production to lower-cost factories in Morocco.

Hourly employees at the Mioveni plant staged a two-day walkout last month, which the company estimates cost it €20 million. The factory is Dacia's main production base, and 90% of its output is exported.

The unit has offered a 9% pay hike to Romanian employees, who currently earn nearly 4,000 lei (€900) per month, according to Reuters. The company asserts that Moroccan workers earn only about half that much.

Renault will soon have three assembly plants in Morocco, including a 50-year-old facility in Casablanca. A joint venture with alliance partner Nissan Motor Co., began building minivans late last year at a €1 billion factory in Tangier that will eventually have annual capacity of 400,000 vehicles.

In December Dacia finalized a joint venture agreement to build a factory in Oran, Morocco. The plant, which will make 75,000 vehicles annually for the European market, is scheduled to open next year.