Renault-Nissan Alliance Signs Long Term Settlement With Employee Union

The Chennai manufacturing facility is one of the largest plants in the Renault and Nissan Alliance and operations started in March 2010. An investment of Rs. 61 billion has already gone into this plant. The manufacturing plant and R&D facilities have created more than 40,000 jobs (direct and indirect included). The agreement then, will be an important one as it will benefit not only the employees but also the alliance. Labour issues cropped up in 2014. Some of the trainees in the company had been asked to leave, citing poor performance.

At that time, the trainees claimed that the company had assured them permanent jobs after completion of a 3 year contract period. The plant had only 1,000 permanent employees and almost 5,000 trainees and contract labourers. But in September 2014, the company let go of 200 employees stating poor performance and this had created problems with political party AAP joining the affected workers in a hunger strike. Renault-Nissan reacted strongly saying that it was under no obligation to offer full-time employment to trainees. Full time employment was offered only on availability of specific roles and performance of the individual trainee. The issue was finally resolved when Renault Nissan India recognised an internal employees union, which would replace the five-member Renault Nissan Works Council (RNWC) at its plant.

Datsun redi-Go

Under the new agreement the plant technicians will receive a salary increase of Rs. 18,000 progressively over the next 3 years. It also includes several benefits and schemes for employees and their families but we're still not aware of the productivity norms specified. While the hike in salary is on the higher side (as we've seen other manufacturers offer an increase of anywhere between Rs. 12000 to 14000). But the Renault-Nissan Alliance seems to be banking on cars like the Kwid and redi-Go to deliver on revenues concurrently.

Colin MacDonald, CEO & Managing Director, RNAIPL says, "The wage agreement with the employee union goes a long way in building a sustainable and performing organization. We have carefully ensured that the employees and families receive best benefits and schemes."

The plant caters to both domestic and international markets and has developed into India's second largest car exporter with more than 600,000 units shipped to 106 countries since 2010. We've already told you about the factory reaching the production milestone of one million cars this year and have already started a third shift operation in response to increasing demand for its products.