Pay talks and job creation at Renault Portuguesa

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This feature focuses on the background to a dispute at Renault's operations in Portugal, which is continuing in November 1997. It outlines the steps taken to create jobs at Renault's Cacia plant in line with a deal signed between the company and the Government, and analyses the current state of pay negotiations which have led to strike action.

In 1996, Renault, the French-based motor manufacturer, had three facilities in Portugal: the assembly plant in Setúbal, the engine manufacturing plant in Cacia and the administrative/sales facility in Lisbon. Since Renault had for a long time been demonstrating a lack of interest in the Setúbal plant, it signed an agreement with the Portuguese Government to allow its purchase by the state, thereby permitting 600 workers to keep their jobs.

Meanwhile the plant in Cacia, which currently employs about 700 workers, had changed its manufacturing line and no longer produced engines. The changeover resulted in the temporary loss of 220 jobs. In a further agreement signed by the Portuguese Government and Renault, the company formally agreed in 1996 to reinstate the previous level of employment. The company claims that the Cacia plant, which switched to manufacturing gearboxes, is now competitive.

Position of the works council

The works council was concerned about Cacia's future plant operations, and negotiations were carried out with management. Even though Renault has stated that it will keep its promises, concrete steps are not being taken, according to the works council, nor is the structure of the factory being readjusted to create the jobs lost in 1996. Production forecasts up to 2000 show that only 50 jobs will be created at most. The works council also states that the company's diversification strategy involves the production of non-essential components for brands of lesser quality, aimed at being sold to other manufacturers. It considers this to be a retrograde move in terms of technology transfer and liable to accentuate regional imbalances, since the location of businesses should be based not only on market concerns but also on employment and development criteria.

The works council (one of whose members participates on the Renault group European Works Council) has stated that Renault's administration should be more transparent during the whole process.

The negotiations at Renault also involve discussion of a set of demands that focus on real wage increases and review of "unfair" wages. The works council proposes an across-the-board monthly rise of PTE 10,000 which represents an increase of around 4% to 5% (2.3% is the Government's guideline) since productivity has increased appreciably (7% to 10%). The pay policy followed by the company over the last few years has been based on performance. According to the works council, performance has been interpreted subjectively by management. For its part, the council believes that length of service should be an important item in determining pay rises. Workers' organisations have already held a meeting with the Ministry of the Economy and have been involved in ongoing dialogue with the company's management.

During this process, Renault workers held a one-day strike at the beginning of November 1997. The strike notice issued by the Industrial Metalworkers' Union of Aveiro and Viseu (Sindicato dos Trabalhadores das Indústrias Metalúrgicas de Aveiro e Viseu), a CGTP affiliate, and the Union of Metalworking and Related Industries (Sindicato das Indústrias Metalúrgicas e Afins, SIMA), a UGT affiliate, stated that the reasons behind the strike were the company's non-compliance with the agreement signed with the Portuguese Government and the lack of real pay increases. The strike met with strong support, primarily in Cacia. Some production lines came to a complete halt.


Concerns about jobs have led to forms of negotiation within Renault that seek to find internal solutions to safeguard employment. To this end, organisations representing workers have also used strategies that will have a preventative effect and focus on medium-term rather than crisis-solution approaches. These centre on ways to reorganise technology and promote an active employment policy within the enterprise, taking into account the territorial implications of its labour relations across the Member States of the EU.

Local company-level bargaining is rare in Portugal and is usually found only in large or transnational enterprises. However, it has a dynamic effect on labour relations and offers an opportunity to debate pay and human resource policies, training opportunities and a host of other regulatory mechanisms at workplace level.

However, these negotiations cannot be characterised as formal collective bargaining per se, since they have not been published in any official source. The most striking result of all this activity is, therefore, that compliance cannot be demanded in court. Consequently taking strike action, the traditional form of exerting pressure in the metalworking sector, arises as a possibility. This is the sector which is statistically most prone to strikes and so events present an opportunity for the two principal union confederations to take such action. (Maria Luisa Cristóvam, UAL)

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