Chennai: An Indian arbitriter has issued orders who ask Nissan Motor Co to pay factory workers with additional wages, even though the warning from the car maker that higher payments can make their business “cannot be run in the long term”.
Nissan and union have been locked in industrial arbitration disputes since July after both parties failed to reach a reciprocal agreement on some problems including higher wages.
The previous wage agreement ended in March 2019.
A court has ordered the Renault-Nissan to pay 3,542 workers an average of more than Rs 7,100 ($ 96) a month in contributions that combined as temporary assistance, according to August 16 which was seen by Reuters.
Payment, higher than the initial offer of a consortium of $ 30 per month but lower than the union request of $ 270, will cost Renault-Nissan around $ 9.53 million in total.
Arbitrators will continue to hear more than 50 other demands by workers for the coming days, which if agreed upon can jointly cost the company of 93% more per worker, Nissan said.
The petition submitted by trade unions and management – which has been reviewed by Reuters and previously not reported – exposes widespread disagreement between workers and Renault-Nissan.
Nissan said in a statement to Reuters on Tuesday it was committed to offering competitive packages to its workers, and was open to retrospective payments at the South Indian factory, he said.
The ongoing legal tussle exposes the business challenge faced by Nissan in the fifth largest car market in the world where, despite investing around $ 1 billion, has checked competitors and struggling for car buyers Woo.
The verdict occurred even though there was an argument by Renault-Nissan that it made a “big loss” in India and had “no financial capacity” to meet the demands.
Each pressure to pay higher wages “has the potential to make unit sustenance that cannot be run in the long term”, the car maker said in archiving 147 pages to the arbitrator in July.
The laws of the workers have been seeking an increase in wages to argue in the 123-page petition that the total wages paid by Renault-Nissan are less than half of what colleagues in the area are like Hyundai motorbikes and pay.
In the order of August 16, Arbitrator ordered Renault-Nissan to pay $ 134 per month for 12 months ending March 2020, and $ 67 Rupee a month for 16 months ended July 2021 in three monthly installments began in September.
“I really believe and conclude that there are cases to provide temporary assistance to workers,” P JyothiMani, Arbitrator, said in the order.
Nissan has tried to restructure some of its main international markets such as India – where it has not decided on the future strategy for its underutilized factory.
The demands of workers include higher basic salaries, an annual increase of 500 rupees, increases of insurance benefits and protection, and appoint additional members in the assembly line to include break toilets.
“Demands made in sacrificial workers for the feasibility of the company are far more than the sacrifices made by managerial supervision and personnel and directors,” Uni said in submission.
Union also said that the surge in food and fuel prices also forced them to ask for more payment.
Renault-Nissan, however, said that local competition, management talent migration to other companies, increased cost of raw materials and poor responses to several car models had hurt business.
The company also argues that the wages of its workers cannot be compared with Hyundai and Ford because they have established factories in this country much earlier, have a higher level of production and better use of factories.
“Union demand is only the desire to have an increase without considering business reality, market salary span and affordability,” Renault-Nissan said in its filing.