Renault Romania unit in pay deal

BUCHAREST (Reuters) – Romanian car maker Dacia, majority-owned by France’s Renault, averted a general strike yesterday when workers accepted a 20 percent pay rise, having originally demanded a 26 percent increase. «We reached a deal with the board for a pay rise of a little above 20 percent and the conflict is closed,» Ion Iordache, trade union leader, told private television Antena 3. Dacia said in a statement the conflict had ended and that it approved plans to raise wages gradually by up to 20.2 percent by July. Dacia, which employs 11,000 people, posted a net profit of -57 million euros in 2005, compared with a loss of -72 million a year before, mainly due to exports of its new Dacia Logan model. Many foreign investors have flocked to Romania, attracted by cheap labor, low taxes and prospects for fast productivity growth. But wage pressures have started to drive some manufacturers to move production to even poorer countries in the region, such as Ukraine, analysts say. The government’s forecasting institute expects wages to grow 11 percent in real terms this year, compared with a 10 percent increase in 2006. Nominally, it sees wage growth of 17 percent versus the previous year’s 18 percent.

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