Spanish car plants seek to prolong boom image

The Iberic country is Europe’s second-biggest carmaker and while much of the European car industry is in dire straits, Spanish assembly plants are raising production, winning new models and creating jobs despite years of recession.

But Spanish manufacturers must expand into research and development while the state needs to improve transport links, despite its deep financial problems, if Spain is to beat lower cost rivals such as the Czech Republic, industry officials say.

At the Martorell plant near Barcelona, headquarters of the Volkswagen-owned Spanish brand SEAT where production rose seven percent last year; workers assemble five different models on a moving carousel.

“Nobody talks about lay-offs here, nor has anyone been fired,” said assembly line worker Pedro Pastor, a 30-year-old father who has worked for SEAT for 10 years. “In contrast, a lot of my friends are on the dole and can’t find work.”

Just as Mexico has a thriving motor industry making vehicles for much of the Americas, its Spanish counterpart is prospering despite the depressed domestic economy by keeping labor costs down and targeting stronger European markets.

The industry created over 2,400 Spanish jobs in the first six months of this year as foreign firms including Ford and even Peugeot Citroen opened production lines, investing 3.5 billion euros in just over a year.

With Spanish unemployment at 26 %, unions keen to protect jobs have accepted flexible work practices and salary freezes, which together with close links to a world-class domestic car parts industry have helped to attract the orders.

Spain has no domestically owned carmakers – Volkswagen bought SEAT from the state in 1986 – but the overall industry accounts for 10 % of economic output and employs 9 % of the workforce.

Via Reuters