Further industrial restructuring and job losses
During autumn 2002, the process of industrial restructuring and workforce reductions has been accentuated in Spain, with major job losses and transfers of production announced in sectors such as telecommunications and motor manufacturing. Trade unions and public authorities are concerned about a number of transfers of production to central and eastern Europe, though other factors such as a fall in internal demand are also contributing to restructuring.
Spain's average Industrial Production Index (Índice de Producción Industrial, IPI) fell by 1% in the eight first months of 2002. The sectors that have shown the greatest falls in production are manufacturing of computer equipment, transport material, footwear and clothing, electrical materials and leather goods. The sectors that have experience rises are paper and graphic arts, manufacturing of precision instruments, wood and furniture, iron and steel and the chemicals industry. The fall in the IPI is one of the symptoms of the process of industrial restructuring that is currently beginning to affect employment.
The restructuring in the telecommunications sector affected three large companies operating in Spain in October: Ericsson (based in Sweden) (ES0209206N), Alcatel (France) (FR0210101N) and Auna (Spain). In the first case, the Ericsson European Works Council met in Paris in late September to examine a planned workforce reduction and plans to adapt the company to the needs of market. The forecast is that this reduction will affect 15,000 jobs. The Spanish trade unions have already expressed their rejection of any reduction in employment.
In the second case, Alcatel has announced the redundancies of 850 persons from all departments and levels, involving almost 30% of all workers at its Spanish subsidiary. In 2001, the same company introduced a redundancy procedure that affected 1,300 workers.
The third company, Auna, is preparing a workforce adjustment that will affect 1,000 employees as a consequence of the restructuring of this whole industrial group, also affecting subsidiary companies such as Amena (mobile telephony), Madritel and Menta (cable operators) and Retevisión.
In addition to these three large companies, Miniwatt, belonging to the LG Phillips Display group, has had a majority shareholding in its industrial activities transferred to the Dutch financial holding company Business Creation. This transfer of ownership affects the manufacture of cathode tubes and job losses are expected, as has already happened with the closure of Phillips Alpiginano in Italy and Phillips Lebring in Austria (some years ago, the company transferred the manufacture of cathode tubes to Hungary). The Spanish unions - the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO), the General Workers’ Confederation (Unión General de Trabajadores, UGT) and the Workers’ Trade Unionist Confederation (Unión Sindical Obrera, USO) - calculate that Phillips has recently cut over 10,000 direct jobs and 10,000 indirect ones in Europe.
Another sector affected by current restructuring is motorcycle manufacturing. Motorcycle sales have fallen by 50% in Spain over the last three years, leading to the loss of about 20% of the jobs in the industry. In this case, the fall in sales seems to be related to a major increase in insurance premia as a result of an increase in the number of accidents. The manufacturers and insurance companies have failed to agree on a reduction in premia, and the social partners are calling for a new plan for the industry, involving government subsidies. However, for the moment the job losses continue: Yamaha has temporarily laid off 200 workers at its Barcelona plant; Suzuki has cut 150 temporary contracts; Piaggio will close its plant in Arganda del Rey (Madrid), involving 103 dismissals, and Derbi had already terminated contracts in early 2001.
The French-based manufacturer Actaris will stop producing electricity and water meters at its Barcelona plant and will reinforce its factory located in Hungary (at Gödöllö). Pay levels in Hungary are half those in Spain. The closure of the plant will affect 150 production workers, but about 100 commercial staff will be maintained. The company states that it is making a profit and attributes the transfer to Hungary to organisational and cost reduction, reasons and the workers have gone on indefinite strike because of disagreements over the redundancy procedure. This transfer of production towards a central and eastern European country follows recent decisions taken by other companies. These include the US-based Lear, which has closed its electrical components plant in Cervera (Barcelona) to manufacture in Poland (ES0206201N), and Seat, which has decided to manufacture 10% of its Ibiza model at the Volkswagen plant in Bratislava (Slovakia) (ES0210204F). The Volkswagen plant at Landaben (Pamplona) has also been affected by the transfer of part of its production of the Polo model to Bratislava.
Trade unions and the public authorities are concerned about these transfers of production to central and eastern European countries with lower pay levels, and the enlargement of the EU towards the east is beginning to feature on the agenda of the Spanish social partners