Dacia management and the plant trade union, Syndicat Autoturisme Dacia (SAD) on Friday (11 April) signed an agreement for an annual pay increase and work at the Logan plant resumed at at noon (GMT +1).

Under the agreement, qualified production workers will receive a gross monthly salary increase of 300 lei (EUR83) from 1 January, 2008, followed by a gross monthly increase of 60 lei (EUR16) from 1 September, 2008.

Technicians, supervisory staff and managers get a 15% raise and all employees will receive a profit-sharing
bonus based on 2007 results. The bonus will be equal to one month's gross salary, with a gross minimum of 900 lei (EUR249).

"Dacia management and the trade union have thus reached a reasonable compromise," Renault said in a statement. "The pay increases are significantly higher than the national average and the average in the
Romanian manufacturing sector. In 2008, the average gross yearly salary of Dacia production workers will be 43% higher than the Romanian average.

"The salaries will also keep the Pitesti plant competitive on producing Dacia vehicles and parts for the
worldwide Logan programme."

The settlement came a day after thousands of Dacia workers rallied in the city of Pitesti, marking a three-week pay strike costing millions of euros in daily losses.

About 6,000 attended the protest, part of a work stoppage called by their union last month, after demands for a 65% wage rise were branded as unrealistic by the plant's management, Reuters reported.

"Wake up Romania! We no longer want to be EU slaves!," read a banner carried by protesters, echoing trade unions' complaints that wages were low given the productivity of the workforce and the profit that each employee generates.

Reuters noted that western carmakers have been attracted to the new European Union member for its cheap labour and low taxes but mounting wage pressure is seen as a risk to the emerging country's economic stability.

Workers at the plant, which produces the low cost Logan, previously earned 1,900 lei ($US819) per month before tax, while the management had proposed a 394 lei rise.

"We're here to show the Dacia management the force that is this union," a protester who has worked for the plant for three years and has a salary of 800 lei, told the news agency.

Ion Iordache, one of the trade union leaders at Dacia, had told Reuters the strike was expected to continue until their demands were met. It was the biggest trade union protest in the Romanian automotive industry since the 1989 fall of communism.

A source close to Renault told the news agency the 18-day-old [to Thursday] strike had so far cost EUR50m ($79.23m), or almost EUR3m a day.

A Paris-based analyst who asked not to be named told Reuters the strike could trim EUR35-40m off Renault's 2008 operating profit.

Average net wages in Romania jumped 30.7% year-on-year in nominal terms in January to 1,200 lei, boosted mainly by bonuses in the health and education sectors, the report added.