Ford Otosan Halts Production as Labor Issues Hit Supply Lines

By Emre Peker

ISTANBUL--Ford Otomotiv Sanayi AS, the Turkish unit of Ford Motor Co. (F) in partnership with Koc Holding AS (KCHOL), said Wednesday that it has halted production at two plants as a labor protest hit its supply lines, triggering a shortage of parts.

The car maker, based in Kocaeli just east of Istanbul, became the latest producer hit by a string of protests started Friday in the nearby province of Bursa, where employees at Renault SA's Turkish manufacturer, Oyak Renault, halted work, demanding higher wages.

On Monday, local automaker Tofas Turk Otomobil Fabrikasi AS--manufacturer of Fiat, Citroen, Peugeot, Opel and Vauxhall vehicles--also stopped production as employees downed tools. The work-stoppage protests also spread to auto parts manufacturers in Bursa, an hour south of Istanbul.

"Labor actions in some automotive suppliers operating in [the] Bursa region have caused interruptions in parts supply to our Golcuk and Yenikoy Plants in Kocaeli," Ford Otosan said in a statement to the stock exchange. "Production will start when the part supply problem is resolved."

Ford Otosan's shares fell 1.5% to 36.65 liras ($14.1) as trading started in Istanbul, compared with a 0.3% slump in the broader BIST-100 Stock Index. The company is 18% publicly owned, with Ford and Koc holding a 41% stake each. Tofas shares also continued their slide, easing 1.1% to 17.75 liras.

Write to Emre Peker at [e-mail]