ISTANBUL—Turkish automotive workers brought production
at two of the country's largest plants to a halt Monday, demanding
higher wages as a walkout that started in a Renault SA factory last
week spread to Tofas—the local maker of Fiat
vehicles.
The protests at the plants in Bursa, south of Istanbul, started
at Renault's biggest plant outside Western Europe when workers on
the first shift Friday downed tools. On Monday, Tofas Turk Otomobil
Fabrikasi AS—manufacturer of Fiat, Citroën,
Peugeot, Opel and Vauxhall vehicles—said it was also
affected.
"Labor actions that have occurred in a couple of companies
operating in the automotive sector in Bursa have been effective on
some workers in our factory," Tofas said in a statement to the
stock exchange. The company said it decided to stop production
until the dispute is resolved.
Fiat Chrysler Automobiles NV declined to comment. A spokeswoman
for Renault said the stoppage is illegal and the company wouldn't
negotiate with the workers, citing a three-year collective
bargaining agreement.
Tofas shares slumped 1.1% to 17.9 liras ($6.9) by Monday noon
trading as manufacturing halted, easing from a record high 18.7
liras on Friday to a four-day low as the benchmark BIST-100 Stock
Index remained flat. Oyak Renault, which runs the Bursa plant and
is a joint venture of the French auto maker and the Turkish army's
pension fund, isn't public.
"We see these developments as a one-off that won't have
long-term impact on the firm and its stock," said Mehmet Gerz, a
portfolio manager at Istanbul-based Ata Invest, which oversees 600
million liras of Turkish assets, including Tofas stock. Tofas's
Fiat-Chrysler partnership is opening up previously inaccessible
U.S. markets to the Turkish manufacturer, while a new, locally
designed passenger auto shows that the "company is on the right
road," he said.
The labor walkout, which doesn't officially qualify as a strike,
comes on the heels of record vehicle sales in Turkey and rising
exports. April auto purchases nearly doubled from last year and are
up 56% compared with the 10-year average, while exports jumped 17%,
according to data from trade associations.
Workers may be seeking to capitalize on booming sales ahead of
the June parliamentary elections, as politicians campaign to raise
the minimum wage amid persistently high inflation, analysts
said.
The automotive sector provides more than 10% of Turkey's annual
exports, and is a key industry for the government as it seeks to
turn around sagging economic growth. Oyak Renault produced more
than 318,000 vehicles last year, exporting about 81%.
The protests gripped Bursa after the Turkish Metal Trade Union
negotiated a 60% raise for employees at a Bosch Ltd. plant in
Bursa, prompting union workers at Renault, and then Tofas, to
demand similar wage increases. Work-stoppages spread to other
Turkish auto-parts manufacturers, according to unions.
"We're faced with a previously unforeseen stance at the Oyak
Renault automotive factory in Bursa," the Turkish-French joint
venture said Friday. "This stance is not in accordance with current
labor laws."
Oyak Renault representatives couldn't be reached for comment
Monday, as some 2,500 continued their protests at the factory. A
spokeswoman for the French auto maker said: "We're hoping we can
try to resolve this calmly."
Turkish Employers' Association of Metal Industries, which
represents many companies including Oyak Renault and Tofas, said
there would be no changes to Renault's three-year collective labor
agreement. The union called for an end to the "illegal"
protest.
While declining to comment on the legality of the protest, the
Turkish Metal Chairman Pevrul Kavrak called on the workers to
resume work. Turkish Metal has 180,000 members nationwide, with
50,000 workers in Bursa, of whom about 20% are participating in the
protests.
"End this before it's too late so that we can resolve the
matter," Mr. Kavrak said Sunday.
The agreement signed between Turkish Metal and the employees'
union on Dec. 15, 2014, runs through the end of August 2017.
Renault employees make 9.83 liras an hour, which Turkish Metal says
is higher than what the union secured for Bosch workers, whose
hourly wage rose to 9.46 liras after no increases for more than
three years.
Still, workers estimated in the thousands resigned from Turkish
Metal, seeking to force negotiations for higher wages and
threatening a prolonged manufacturing-halt barring a new
settlement.
Jason Chow in Paris and Eric Sylvers in Milan contributed to
this article.
Write to Emre Peker at emre.peker@wsj.com
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