Economy, Auto

Labor Dispute Harming Turkish Industry

Labor Dispute Harming Turkish Industry
Labor Dispute Harming Turkish Industry

Renault has said it might rethink its investment in Turkey if a labor dispute, which has stopped production at its joint venture Oyak Renault, brings instability, Zaman News reported.

Tofas and Ford unit Ford Otosan as well as Oyak Renault have all halted production because of the widening dispute which has hit suppliers.

A Ford Otosan official told Reuters that the company was restarting production at 13:00 GMT, a day after halting output at two of its plants in northwestern Turkey.

Renault's Jean Christophe Kugler said Turkey was a high-potential market which Renault had bet on for the long term. He said the dispute was a threat not only to Turkey, a major automotive parts producer, but also to the global industry.

"If we see instability coming we will reconsider our investment," he told reporters at the Istanbul Autoshow.

Earlier, Industry Minister Fikri Ishik said at the car show he wanted to see an immediate resumption of output, saying workers' demands for better pay and conditions could be discussed while production continues.

"The production loss until now is not to a degree that it can't be made up. An unexpected halt in production could result in the automotive sector being left in a disadvantageous position," he said.

"This situation harms Turkey in various areas including exports... These demands can be discussed while production continues," he added.

The action has spread to a number of parts suppliers clustered around the northwestern city of Bursa, the Turkish auto industry hub, and comes just weeks ahead of a June 7 parliamentary election.

While Otosan said it was restarting output, Tofas assembly line worker Zeki Kirlak told Reuters by telephone that he and his colleagues outside their plant in Bursa were continuing their protest action.

Production at Tofas and Oyak Renault, which account for more than 40 percent of Turkey's annual vehicle production, was halted after the protest action began at the end of last week.

Workers say the dispute blew up after union Turk Metal last month negotiated a 60 percent wage hike for workers at a plant run by parts maker Bosch Fren, but failed to secure a similar deal elsewhere.

Workers at Tofas, owned by Italy's Fiat and Koch Holding, say Turk Metal is appointed with the approval of Tofas management and does not primarily serve their interests. They also want a pay increase.