Wage tussle exposes the potholes Renault-Nissan faces in India
Arbitrator asks the Japanese vehicle manufacturer to pay workers $9.5m in back pay as an interim settlement
17 August 2021 - 16:56
bySudarshan Varadhan and Aditi Shah
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The logos of car manufacturers Nissan and Renault. Picture: REUTERS/VALENTYN OGIRENKO
Chennai — An Indian arbitrator has asked Renault-Nissan to pay its 3,542 workers at its southern Indian plant an average of more than 7,100 Indian rupees ($95.70) a month in additional wages as interim relief, according to a copy of the order reviewed by Reuters.
Workers at the Renault-Nissan plant in Chennai filed an industrial arbitration suit demanding 20,000 rupees as a monthly interim settlement after the expiry of a previous wage agreement in March 2019. The consortium had agreed to pay an average of 2,250 rupees every month to the end of March 2021.
Nissan told the arbitrator its business in India could become “unviable in the long run” if it were to give in to demands of higher pay from its factory workers, according to a court filing by the Japanese vehicle manufacturer.
Nissan and its union have been locked in a legal arbitration dispute since July after the two sides failed to reach a mutual agreement over several issues, including higher wages.
In an order dated August 16, a judge ruled that Renault-Nissan should pay 10,000 rupees per month for the 12 months ending March 2020, and 5,000 rupees a month for the 16 months ending July 2021. Reuters has reviewed the petition and the order, which have previously not been reported.
That would cost the management 708.4-million rupees — or about $9.53m — according to Reuters calculations.
Nissan Motor Company, which the majority owner of the plant, did not immediately respond to an e-mail seeking comment.
The tussle exposes the business challenges Nissan faces in the world’s fifth-largest car market where, despite investing about $1bn, it has been elbowed out by competitors and is struggling to woo car buyers. The setback shows the pressure that Nissan is under as it tries to restructure some of its key international markets such as India, where it is yet to decide on a future strategy for its underused factory.
The order states that the arrears must be paid by management “in three monthly equal instalments” from September 1.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Wage tussle exposes the potholes Renault-Nissan faces in India
Arbitrator asks the Japanese vehicle manufacturer to pay workers $9.5m in back pay as an interim settlement
Chennai — An Indian arbitrator has asked Renault-Nissan to pay its 3,542 workers at its southern Indian plant an average of more than 7,100 Indian rupees ($95.70) a month in additional wages as interim relief, according to a copy of the order reviewed by Reuters.
Workers at the Renault-Nissan plant in Chennai filed an industrial arbitration suit demanding 20,000 rupees as a monthly interim settlement after the expiry of a previous wage agreement in March 2019. The consortium had agreed to pay an average of 2,250 rupees every month to the end of March 2021.
Nissan told the arbitrator its business in India could become “unviable in the long run” if it were to give in to demands of higher pay from its factory workers, according to a court filing by the Japanese vehicle manufacturer.
Nissan and its union have been locked in a legal arbitration dispute since July after the two sides failed to reach a mutual agreement over several issues, including higher wages.
In an order dated August 16, a judge ruled that Renault-Nissan should pay 10,000 rupees per month for the 12 months ending March 2020, and 5,000 rupees a month for the 16 months ending July 2021. Reuters has reviewed the petition and the order, which have previously not been reported.
That would cost the management 708.4-million rupees — or about $9.53m — according to Reuters calculations.
Nissan Motor Company, which the majority owner of the plant, did not immediately respond to an e-mail seeking comment.
The tussle exposes the business challenges Nissan faces in the world’s fifth-largest car market where, despite investing about $1bn, it has been elbowed out by competitors and is struggling to woo car buyers. The setback shows the pressure that Nissan is under as it tries to restructure some of its key international markets such as India, where it is yet to decide on a future strategy for its underused factory.
The order states that the arrears must be paid by management “in three monthly equal instalments” from September 1.
Reuters
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