Economy vs. coronavirus: Romania’s biggest company Dacia will suspend activity due to COVID-19. Ford has also announced a similar measure

Update: The management and unions at the Dacia car factory in Romania have agreed to temporarily suspend the production starting Thursday, March 18, until April 5. During this period, the employees will stay at home and be paid 85% of their wages, union leaders told Digi24.ro.

The management of Romanian car producer Dacia has initiated talks with the unions to temporarily suspend production at its local factory in Mioveni due to the new coronavirus pandemic. The factory has about 14,000 employees who could be sent into technical unemployment. US carmaker Ford has already announced a similar measure at its local factory in Craiova.

“We have this meeting to set up a plant closure schedule, to see if we stop working on Thursday or Friday. It's about 14,000 people, we have to protect them, we can't continue like this. We need to find a solution to get into temporary unemployment. It is difficult to protect the workers in the factory, there are many common spaces where they come into contact,” Ion Iordache, the vicepresident of the Automobile Dacia Union told G4Media.ro.

Meanwhile, US carmaker Ford has already announced that it will suspend production at its car and engine factory in Craiova, southern Romania, because of the coronavirus pandemic. Ford Motor Co. said on Tuesday that it will halt vehicle and engine production at its manufacturing sites in continental Europe, effective Thursday, over COVID-19 concerns. Ford said the manufacturing facilities will be down for a number of weeks but did not go into specifics.

“While the impact of coronavirus at our facilities so far has been limited thankfully, its effects on our employees, dealers, suppliers, and customers, as well as European society as a whole, is unprecedented,” Stuart Rowley, president of Ford Europe, said in a statement. “Due to the dramatic impact this ongoing crisis is having on the European market and the supplier industry — together with the recent actions by countries to restrict all but essential travel and personal contact — we are temporarily halting production at our main continental Europe manufacturing sites.”

The trade union at Craiova factory said they have been notified that operations would be suspended at least until April 5. During this period (March 19 – April 5), the company will pay the employees 78% of their salaries. Ford is now discussing with the Romanian Government solutions for continuing to pay the employees after that date, in case the production remains suspended for a longer period.

Dacia and Ford are two of the biggest industrial employers in Romania. The temporary closure of their plants could trigger similar decisions at their local suppliers, with a serious negative impact on the local industrial production, which generates almost one quarter of the country’s GDP. Connected sectors such as transport and logistics will also feel the blow.

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(Photo source: Dacia)