Unions accept working time plan in exchange for fewer job cuts at Nissan

In January 2008, the car manufacturer Nissan announced its plans for redundancies affecting 450 permanent workers out of a total 4,500 production workers at the group’s Barcelona factory. The company’s management took the decision in light of a 7.3% reduction in planned production levels for 2008. However, a preliminary agreement concluded in February 2008 provides for more flexible working time schedules in exchange for a partial withdrawal of the redundancy measure.

On 4 January 2008, the Nissan Motor Company initiated a redundancy procedure as a result of the reduction in production levels planned for this year. The company has attributed this reduction to both external and internal factors. Among the initial reasons mentioned were the strength of the euro and its effect on hampering exports, along with the decision to transfer production to Thailand of one of the models previously assembled at the Barcelona plant in northeast Spain. The internal factors concern the trade unions’ refusal to accept a viability plan presented by the company.

Extension of company agreement

Following the announcement of the restructuring measure, company management and the trade unions agreed to extend the duration of the company agreement covering the period 2004–2008 for another year. The agreement includes a wage revision clause and provides for the maintenance of current working conditions standards. The agreement’s extension allows both parties involved to separate collective bargaining on the renewal of the agreement from the negotiations on the workforce adjustment.

Voluntary redundancy plan

In order to alleviate the effects of the redundancy procedure, after a meeting with the worker representatives, the company announced a voluntary redundancy plan for which all production workers are eligible. The total number of workers affected will depend on the success of this plan, which is to last for one month. At the plant, about 200 workers are aged over 55 years and will be eligible for the early retirement plan agreed with the company. The company’s management is unwilling to consider other less traumatic alternatives for adjusting workforce levels which the trade unions have proposed, such as pre-retirement options.

Reasons for job cuts

One of the reasons put forward by the company to justify the redundancy procedure was the lack of agreement with the trade unions on proposals to improve the company’s competitiveness. In the summer of 2007, the management presented to the workers’ committee an Industrial Plan, which provided for an investment of €400 million and an increase in production between 2008 and 2010. However, these investments, such as the allocation of production of a new van model, were linked to a 12% reduction in costs, a reduction in absenteeism and an increase in working time which involved opening the factory 250 days a year, 25 more days than at present. The negotiations with the workers’ committee broke down in late October 2007, after it was announced that the new van would be manufactured in Tangier in northern Morocco and that the investments would be cut by half.

Nissan also claims that Spanish law on temporary recruitment is inadequate for the automotive sector: in October 2007, in compliance with the current legislation, the company was forced to convert 465 temporary employment contracts into indefinite contracts at a time when production was declining.

Trade union views

The trade unions’ main argument against the redundancy procedure is that the company agreement in force since 2004 offers adequate flexibility to avoid job losses through the relocation of surplus workers to other assembly lines in the factory which are not affected by the reduction in production levels. Although the company announced, in October 2007, its intention to increase production of one of the models assembled at the Barcelona plant in order to compensate for the transfer of the new van to Tangier, the trade unions believe that the plant has no long-term viability scheme, as the three models currently manufactured in Barcelona are at a mature stage of their lifecycle.

Commentary

Nissan’s announcement falls within the framework of the restructuring process which has affected the entire value chain of the automotive sector in Spain in the last year, impacting on the components industry in particular (ES0707039I). The major vehicle manufacturers tend to use investments and the maintenance of employment levels as a bargaining strategy for obtaining concessions from the worker representatives (ES0709029I); Nissan used a similar strategy in the bargaining of the current company agreement (ES0406207F). In fact, a preliminary agreement concluded in February 2008 with the majority trade unions in the company has meant the acceptance of working time flexibility measures, previously rejected, in exchange for a partial withdrawal of the redundancy procedure by the company’s management.

Juan Arasanz Díaz, QUIT, University Autònoma of Barcelona (UAB)