One stage in the restructuring process of Electrolux, the Swedish-owned multinational, seems to have been concluded in late 1997. Thanks to the financial support of Spanish central and regional government, new investments will be made in the Spanish plant in La Rioja. However, several of the group's plants have been closed elsewhere in Europe.
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One stage in the restructuring process of Electrolux, the Swedish-owned multinational, seems to have been concluded in late 1997. Thanks to the financial support of Spanish central and regional government, new investments will be made in the Spanish plant in La Rioja. However, several of the group's plants have been closed elsewhere in Europe.
The great question mark that has hung over the Spanish factory of Electrolux for months was removed in late 1997 by a solution that is satisfactory for the workers of the plant in La Rioja (ES9708218N). The Swedish-owned "white goods" multinational has decided to invest ESP 3,500 million for the production of the new Euro-Combi refrigerator model in Spain. This has saved the Spanish plant from the closure that has so far affected factories in the United Kingdom, Sweden, Finland, the Czech Republic and the USA, as well as in Spain's most direct competitor for this refrigerator, Hungary.
The Spanish workers' committee and the company management in La Rioja had exerted pressure on the Spanish authorities to obtain this new investment and thus save 700 jobs. To this end, central government and the regional government of La Rioja have offered the company more than ESP 900 million in support of the planned investment. It is therefore assumed by commentators that the Spanish option prevailed over the Hungarian one thanks to the public subsidies, and over other possible sites in the north of the EU due to the lower labour costs.
However, it is not yet clear whether the restructuring of the multinational has come to an end. Its economic performance over the first six months of 1997 was not good. There was a certain improvement between July and September, but new redundancies seem possible.
In a crisis such as this, it has been argued that a European Works Council with a certain capacity for intervention could have acted to find the most balanced solution for the workers. The Spanish trade unions and workers may be content in this case, but there is no doubt that the same cannot be said for the Hungarians or those of other European countries.
Eurofound recommends citing this publication in the following way.
Eurofound (1997), Electrolux chooses to invest in Spain, article.
