Tabacalera's industrial restructuring plan criticised

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The industrial restructuring plan announced in July 1999 by Tabacalera, the Spanish tobacco firm, will involve a reduction in the number of factories and a 15% reduction in the workforce. The plan has met with a negative response from the trade unions, the regions affected and the government.

In July 1999, Tabacalera, a recently privatised company manufacturing cigarettes and cigars, announced a industrial restructuring plan for the next three years. The plan involves concentrating production in eight centres, the closure of eight plants, the construction of two new plants and a 15% reduction in the workforce. The objective is to raise the productivity of the company to the European average by 2003 (the year in which the restructuring is due to end).

The concentration of production means that the current 14 factories will be reduced to eight, of which two will be new plants: one in Alicante that will take on the current production of the factories in La Coruña, San Sebastián, Valencia and Alicante; and one in the North (whose location is yet to be decided) that will take on the production of the factories in Gijón, Málaga and Santander.

According to the company, the workforce will be reduced by non-traumatic means at 5% per year for three years. The reduction will affect 1,400 workers, and will be carried out mainly through "pre-retirements", with a commitment to redeploy all workers affected by the closures who are not of retirement age. It is expected that there will be 950 pre-retirements and 450 redeployments.

The Tabacalera restructuring plan has met with a negative response from several quarters. The majority trade unions in the Tabacalera multi-plant workers' committee, UGT and CC.OO, have reacted very strongly to the plan and have announced mobilisations. They consider that the plan involves redundancies and dismantling of the company and complain that it is to be carried out in a very short time. The response of the company to the unions' reaction is that the adjustment of the workforce will be negotiated.

The regions (autonomous communities) affected by the plan have reacted negatively due to the loss of direct employment and the conflict that it will generate. The government has also expressed its criticism of the plan, because in the framework of its current campaign against pre-retirement (ES9906136N), it is not keen on companies with high profits (Tabacalera made a net profit of about ESP 20 billion in 1998, 36% more than in the previous year) improving their profitability by using this option. According to the company, the plan is necessary in order to ensure competitiveness in the European market in the near future.