Car manufacturer SEAT and trade unions agree on a cost reduction plan in order to save 340 jobs
After an 8.3% drop in car sales in 2012, SEAT announced it would lay off 400 temporary workers and it would reduce administration and commercial costs, to the equivalent of 340 additional jobs. Finally, after three days of negotiation, the car company and the workers’ representatives have signed an agreement by which the workers will lose part of the extra hours accumulated but there will not be additional layoffs or a salary reduction. However, the 400 temporary workers will be made redundant and will have to leave the company. Additionally, the Spanish Government has announced that it will double the public budget to stimulate car purchases.
Martorell (ACN).- The Barcelona-based car manufacturer SEAT, which is part of the Volkswagen group, and the workers’ representatives announced on Friday that they have reached an agreement to implement a cost reduction plan while guaranteeing salaries and jobs, although the layoff of 400 temporary workers announced on Monday will still go ahead. After an 8.3% drop in car sales in 2012 due to the recession in Spain, which is Seat’s main market, the company announced this week that it would lay off 400 temporary workers and it would reduce administration and commercial costs, to the equivalent of 340 additional jobs. Finally, after three days of negotiation, the car company and the workers’ representatives have signed an agreement by which the workers will lose part of the extra hours accumulated but there will not be a salary reduction and layoffs will be limited to the 400 temporary workers. Additionally, the Spanish Government has announced that it will double the budget of the public programme stimulating car purchases by renewing old vehicles. In 2013, the programme will be increased from €75 million to €150 million in order to deal with the drop in car sales in Spain due to the economic recession.
Seat manager and workers’ representatives agreed on Friday morning to reduce the number of extra hours accumulated – which will not be compensated – in exchange for not reducing salaries or wage bonuses. In addition, the company has agreed to guarantee employment stability in 2013. The Chairman of the Seat Workers Committee, Matías Carnero, stated that the agreement is “positive”, as it guarantees jobs. The Seat Manager for Labour Relations, Juan Sánchez, emphasised that the agreement uses the labour flexibility tools to avoid layoffs, while the competitiveness of the company is sustained. However, the company has announced that the 400 temporary workers will be made redundant anyway, as Seat will reduce its car production so that it matches car sales projections.
Flexibility
“Even though the results of the company are not the best, in the current context we have found a solution with a flexibility tool using the number of extra hours accumulated”, noted Carnero in front of the press when he left the meeting with Seat managers. Unions agreed to reduce “the excess” of extra hours. Sánchez insisted that “the company’s need was to reduce costs to improve competitiveness” and he reminded the workers that the initial plan foresaw 340 layoffs. “This agreement reached the objective of reducing costs, but through labour flexibility. In this case, it has been agreed to reduce the number of extra hours that workers accumulate”, he said.
A competitive company
“The company is competitive in relation to the rest of the companies in the Volkswagen Group”, he emphasised, in relation to Seat’s position to build new car models from other brands, such as Volkswagen, Audi and Skoda. Seat has a huge factory in Greater Barcelona, in Martorell, connected by railway to Central Europe and Barcelona Port. In fact, it also has a large logistics centre in Barcelona’s Zona Franca district, located next to the sea port, from which it can board vehicles onto cargo ships and transport them to any market. For instance, Seat started to sell its cars in China in 2012, boarding the vehicles onto ships in Barcelona Port.
400 temporary workers being laid off
However, despite the agreement saving 340 jobs, the 400 temporary workers out of the 600 hired to deal with the increase in car sales in 2011 will be made redundant as the company will eliminate 1 out of the 3 shifts producing the Seat Ibiza car model. “These temporary workers are part of the internal flexibility measures and thanks to this we can keep the stability of Seat’s direct staff”, Sánchez stressed. Carnero, from the Workers Committee, lamented losing 400 temporary workers but he hoped that they could return whenever it is necessary; for instance if the third shift is required again or to build other car models, such as the new Seat León.
A bigger budget for Spain’s public programme stimulating car purchases
The Spanish Government announced on Friday, after the weekly Cabinet Meeting, that it will double the budget allocated in 2013 to the plan to incentivise the purchase of efficient vehicles, known as the Pive Plan. The public budget will be increased from €75 million in 2012 to €150 million this year, in order to help “one of the most transcendental sectors of our country”, as the Spanish Prime Minister, Mariano Rajoy, said from Chile, where he is on an official visit. In addition, there will be a plan to stimulate the purchase of light commercial vehicles such as vans. This other plan will be called the Clima Aire Plan and it will have a €40 million budget.
The previous Pive Plan ended on the 10th of January 2013. It offered a 2,000 euro grant to people buying a new car if they gave their old car in exchange, which was required to be at least 12 years old. In 2013, the plan will keep the same conditions. According to a study made by the association of the Spanish car manufacturers Anfac, the Pive Plan has generated a fiscal revenue of €300 million, of which €100 million corresponded to the additional demand generated by the plan itself.