Strike shuts down production at Serbia's top exporter Fiat Kragujevac

Strike shuts down production at Serbia's top exporter Fiat Kragujevac
By bne IntelliNews June 28, 2017

Workers at the Fiat Chrysler Automobiles (FCA) Srbija factory in the town of Kragujevac went on strike at 6am on June 27, forcing the plant to stop production. 

FCA, a joint venture between Italy's Fiat and Serbian government, is the only car manufacturer in Serbia. FCA remained Serbia’s largest exporter in January-April, when the company’s exports were valued at €382.2m, even though production was cut in 2016 and workers were laid off. 

Workers decided to go on strike because they failed to reach deals on salary increases. They also want their work to be reallocated or for new people to be hired after around 700 people took voluntary redundancy last year. Workers claim they are overloaded, and say they have been forced to take on extra tasks after the management failed to find a proper solution to replace those who left or are on extended leaves.

This follows a significant reduction in the number of workers at Fiat’s factory in Kragujevac, from 3,200 to 2,500, in July 2016. Since then the company has worked only two shifts and produces around 400 vehicles a day, down from the 640 cars a day produced in three shifts previously.

According to Zoran Markovic, the leader of the Kragujevac-based Independent Union, about 2,000 workers from the first and second shifts are taking part in the strike, news agency Beta reported. However, another 250 people who work in administration are not on strike. 

Markovic told journalists at a June 27 press conference that workers have been given extra tasks as the factory is understaffed.

“Last year, when FCA had more workers, it produced 85,000 vehicles but even though about 1,000 people left, the plan for this year remains the same,” Markovic said.

He said that workers are demanding an increase of their gross wages, for example from RSD38,000 (€310) to RSD45,000. The union says FCA needs to give up only 0.5% of its profit to finance the pay increase, Beta reported.

According to Markovic, FCA’s workers will remain on strike until they reach a deal with the management. They also want bonuses to be increased, and paid for 2017 and 2018.

“We expected representatives of the company to take a part in negotiations which were scheduled for [June 26] in Belgrade, which was agreed with Minister of Economy Goran Knezevic. But, representatives of FCA didn’t show up,” Markovic said.  

“[FCA] is, wisely, shutting up about negotiations because it believes that is very strong… but it has to respect the laws of Serbia, it doesn’t matter if it is big Fiat or small Yura,” he added, referring to Korean Yura Corporation, a producer of electrical and electronic components for the automotive industry. Yura has four factories in the central-eastern part of the country, employing over 2,000 people.

However, Markovic’s comparison doesn’t seem to be appropriate since Yura workers have significantly worse working conditions and lower salaries than those at FCA, according to local media. There are even reports, based on statements from Yura employees, that workers have to wear adult diapers to avoid taking toilet breaks during working hours. Salaries of production workers at Yura are the minimal wage of RSD27,990 (gross) for 160 hours a month.

The Serbian government has sought to attract foreign investors in the manufacturing sector, offering financial incentives on top of the attraction of the low costs in the country. However, there is growing sentiment within Serbia against the presentation of the country as a low cost manufacturing destination. This was one of the grievances voiced by protesters following the election of Aleksandar Vucic as president in April.

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