Volkswagen threatens to transfer production to Slovakia

The management of the Volkswagen plant in Pamplona is threatening to transfer production of the Polo model to its Bratislava plant, as happened previously with the SEAT Ibiza model. Currently, the collective agreement is at a standstill, with the company using the threat of relocation to weaken the position of the works council.

Management offer

Negotiations on the collective agreement of the Volkswagen (VW) factory at Landaben in Pamplona, northern Spain, have been at a standstill for more than 15 months over the question of pay flexibility. The management of VW is proposing to increase pay by half a percentage point above the Consumer Price Index (Índice de Precios al Consumo, IPC) for all financial years up to 2008.

Management is also proposing a work schedule of 209 days per year with 11 days’ flexibility, without a wage reduction. However, part of this offer stipulates that, in the year when a new model is being launched and in the subsequent year, the flexibility may be 11 days more or less than normal.

Finally, the company is offering early retirement for workers at the age of 60 years.

Trade union demands

The Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO), the General Union of Workers (Unión General de Trabajadores, UGT) and the Patriotic Workers’ Confederation (Langile Abertzaleen Batzadeak, LAB) are willing to accept the pay increase offered by management (half a percentage point above the IPC figure), but they also demand 100% of the pay scale rates for 2005, plus an additional 1% on top of that and two payments of €250, one of which will form a permanent part of the wage packet.

Moreover, they propose a flexible work schedule of 209 days per year with nine days’ flexibility.

In addition to the bargaining gap between management and the employee representatives, there is a further problem: the proximity of trade union elections has radicalised the position of the trade unions.

Attempts to break deadlock

In response to the deadlock in the bargaining of the collective agreement, on 29 March 2006 the company decided to set a deadline of 7 April for reaching agreement. The regional government has attempted to mediate between the parties in order to avoid the relocation of production to Bratislava in Slovakia, and on 9 May made an appeal to the sense of duty of the parties involved in the dispute.

Repercussions of dispute

The VW plant in Pamplona employs 4,200 workers. Since late March 2005, these workers have held several strikes in protest against the current standoff on bargaining of the collective agreement and the threat of relocation (ES0510201N). In March 2006, management decided to withdraw its offer to produce 10,000 new units of the Polo model in the Landaben factory, stating that they ‘lacked the stability that would have been provided by the signing of the collective agreement’.

The Polo is also produced in the Bratislava plant, to which VW transferred 10% of production of the SEAT Ibiza from its plant in Martorell, Barcelona, between 2003 and 2005 (ES0210204F). This was a sanction measure imposed by management in response to a deadlock in negotiating a collective agreement. The situation in Martorell (ES0601102N) was very similar to the current position in VW Landaben, Pamplona.

Management claims that the net profits of Volkswagen Landaben fell by 14% in 2006 in comparison with the previous year. Due to falling demand in the markets of France, Germany, Italy and Great Britain, in 2005 the plant produced and sold only 211,678 vehicles, which was 9% less than the level for 2004.

Antonio Martín Artiles, QUIT-UAB