SEAT agreement seeks competitiveness within VW group

Download article in original language : ES0006292NES.DOC

April 2000 saw the conclusion of a new four-year collective agreement at SEAT, the Spanish subsidiary of the Volkswagen group. The deal follows a similar line to its predecessors: wage moderation; an eight-hour reduction in annual working hours; no clauses on reducing overtime; and the same flexibility of working hours, but now with individualised compensation in a wide range of forms that can be chosen by the workers.

A new collective agreement (the 16th at the company) was signed in April 2000 at SEAT, the motor manufacturing company belonging to the German-based Volkswagen (VW) group. The company currently employs around 14,500 workers, 90% of whom are members of the majority trade unions in the firm - the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO), the General Workers' Confederation (Unión General de Trabajadores, UGT) or the General Confederation of Workers (Confederación General de Trabajadores, CGT).

As usual, the points of contention were wages and the organisation of working time. The agreement required several months of bargaining and although the workers' representatives had a joint platform of demands, there were important divisions among them. As usual, CGT did not sign the collective agreement and the divisions within CC.OO between the "official" and "critical" lines were more evident than usual. The tensest moments were when UGT signed a pre-agreement with the management, and the assembly of CC.OO members decided by an absolute majority that their representatives should not sign the agreement. Finally, the management and CC.OO ironed out their differences, and the collective agreement was signed by CC.OO and UGT.

As in the previous agreement (ES9811288N), the management used the competitiveness of the company within the multinational VW group as an argument in the negotiations, claiming that the company must continue to meet with the approval of the group headquarters so that it locates the entire production of new SEAT models in the Spanish plants. In this respect, SEAT management considers that it has fulfilled its part of the commitment to the future of the company: in 2000, investments have increased by 88% for the launching of new models and the modernisation of plants. However, SEAT management claimed that it was vital to reach a collective agreement with the trade unions which placed the Spanish plants in a better position, so as "to prevent the VW group from being tempted to shift production to other plants". The collective agreement seeks to achieves this aim through the following provisions:

• a longer period of validity. The agreement should ensure industrial peace for four years (2000-3);

• wage moderation. The workers' representatives demanded a wage increase of 5% (to recover the purchasing power lost in the past few years by the wage freeze imposed after the company's crisis in 1993), but the increase finally agreed was the forecast rise in the retail prices index (RPI) plus 0.4 points (2.5%). A wage revision clause has been introduced and will be applied monthly, starting from the month in which inflation exceeds government forecasts;

• conversion of temporary contracts into permanent ones. Once more it was agreed that full-time temporary workers hired by the company between the signing of the previous company agreement (November 1998) and the signing of the present one will be given permanent contracts when they have two years' service; and

• flexible working hours which, when necessary, allow the production capacity of the plants to be increased. For 2000 and 2001 working hours are not reduced, and then for 2002 and 2003 they will be reduced by one day (eight hours) per year. Working hours are to be calculated on a four-year basis for some plants. There will continue to be eight days' difference per year between the working hours and the company's operating hours, and additional Saturday working will continue (where required by production necessities, each worker is obliged to work 13 Saturdays a year). These measures to flexibilise working hours were accepted some years ago as a way of avoiding redundancies or, in a situation of economic boom, to create employment, in which case they would be compensated by time off. So far there have been no redundancies, quite the opposite, and it seems that job creation follows more from increases in production than from the organisation of working time, which is mostly compensated by paying overtime. Furthermore, accepting this de facto situation, the new agreement establishes new types of compensation for part of the overtime work, which are unrelated to time off which creates employment. Copying a model established in VW factories, the workers can decide individually between payment in kind for overtime (in the form of contributions towards the purchase of a car or a dwelling, paid leave instead of suspension of contract in the event of redundancy, or pension contributions) or compensation in time (individual time off or a reduction in working time prior to retirement).

The working time provisions raise the question for some commentators of what has happened to the trade union commitment to reducing working hours and overtime as part of a policy of sharing employment. Critics are pessimistic about the attainment of these objectives through collective bargaining at company level, in the light of such agreements in companies with a high union membership, in a context of expansion of production and economic growth.