Twenty years ago Spain was a great country to build cars - new factories on cheap land, an inexpensive workforce and a location not too distant from key European markets. All three advantages have been lost against competition from places such as Bratislava, which started to make the Seat Ibiza in 2002.
Are wages here too high? Considering local property prices, you’d think not: a shop floor worker in Martorell, Seat’s Barcelona factory, earns barely half the gross salary of his VW counterpart in Wolfsburg. Yet José - and to Seat’s credit, quite a few Josefinas - costs four times more than Yusef in Poland or Rumania. By Spanish standards, Seat workers earn around 10% more than other auto-industry labourers - though Nissan España workers get a groat more - and, as if by coincidence, this is the margin that management wants to slash, aiming to save some 50 million euros a year.
Another factor distorts the scene: Spanish land prices, sky-high today, mean that not only are potential newcomers staying away, but long-term investors are selling up and hauling out. Samsung made a packet on site appreciation after closing down its Catalan plant, and Renault will make so much from the sale of its truck factory in Villaverde (Madrid), on land recently reclassified for housing use, that the company can afford to pay off worker compensation in full, build a new plant in Lyons and pay French workers French salaries for the foreseeable future.
Almost as important as cost factors are the national interests supporting Renault - a state champion - and VW, which has been part-owned by Lower Saxony throughout the post-war period. Rather than build the Golf-based off-roader Marrakesh in Setubal (Portugal) with low salaries, the planned new model is going to VW’s plant in Emden to save 1,000 jobs in Germany. Workers are voters.
In Catalonia the regional government, the Generalitat, is in a bind: by law, substantial layoffs such as Seat’s must be approved by the Generalitat, which understands full well the international signal it would send to direct foreign investors if the authorities intervened too heavily in what is a global free market. So it looks certain that the 1,340 jobs will be chopped. But recent developments suggest that the unions - pretty much hamstrung and reduced to negotiating the length of sandwich breaks - are using the Generalitat to lobby on their behalf for better severance terms: the Generalitat-trade union meeting in late November, attended by a phalanx of press photographers, coincided with Seat management hiking its compensation offer to an almost implausibly generous level. Foreign investors eyeing Catalonia will be taking worried note of this, no doubt.
What more can be done? Unions have asked that Audi dealers open their showrooms to Seat - supposedly remodelled as the VW-Audi Group’s “sporty” brand - but lower profit margins on Seats would mean value stripped out of a specialist distribution chain. Seat president Andreas Schleef holds out the promise of a vigorous launch of the Seat brand in the USA next year, but the vehicles could be supplied by VW’s Puebla plant in Mexico, just as the Seat Arosa comes not from Martorell, but from Portugal. The sports rebranding is working, but slowly; the Leon is very popular in the UK, and the Scalextric range - influential in Dads-and-Lads purchasing decisions for real cars - features Seat’s Cupra models alongside Porsches. But it’s too little too late.
In a crowded market, the simple truth is that Seat designers have been getting it wrong. Is the Altea a sports car or an MPV? It’s too dumpy to look sporty and too cramped in the back to be a full five-seater. The new Toledo too closely resembles the unpopular Renault Vel Satis. Both are brilliantly engineered cars, but haven’t found a market.
It’s all a crying shame, with underlying consequences for the social fabric of Barcelona. I visited the Martorell plant last summer and found it a happy hive of industry providing decent jobs to a largely “charnego” workforce of Spaniards whose parents came from outside Catalonia. Foreign companies such as Seat have been a major force in raising the expectations and standards of living of an ethnic group which still finds it difficult to enter the select “rentista” landlord and administrative class of Catalans. The 16,000-strong march against the lay-offs in November was identifiably a “charnego” affair. And the “charnegopower” pop band Estopa, former Seat workers, interviewed on TV3 for their new album, signed off with two sentiments: “Força Barça” (predictably), and “Support Seat workers - because it could be you next”.
