Delphi's embattled Spanish unit Delphi Automotive Systems Espana would consider giving up assets at its loss-making Puerto Real factory to compensate workers in a major redundancy scheme that will see the supplier exit Spain's struggling components industry, trade unions told just-auto on Tuesday.

However, they said Delphi is willing to give up the assets only if a buyer emerges for the loss-making factory, which supplies Ford, GM, Mercedes and other car-making heavyweights.

It also wants to retain the factory's customers, casting gloom on the site's future.

"This won't work," Ramon Gorriz, a director at Spanish union Comisiones Obreras (CCOO) in Madrid, who is overseeing negotiations, told just-auto. "They can cede the assets but if there are no clients and contracts to supply the product too, all we can do is junk them."

Delphi officials could not be reached for comment.

Gorriz said Delphi has to yet to present a compensation and viability plan for the future of the factory's 1,500 permanent and 2,000 auxiliary workers - which it wants to dismiss - and that unions will continue to fight tooth and nail until it does so.

He said Delphi, unions and government officials will meet this week to try to thrash out a deal to end the crisis but that prospects for a resolution are "looking very grim."

"The president [Jose Luis Rodriguez Zapatero] has promised to ensure that not one worker loses his job in this dispute and we hope those promises are fulfilled," Gorriz said, adding that if the state doesn't come through, unions will continue to exert pressure through industrial action.

Such actions have already resulted in large strikes and protests across Spain, where the four-month dispute has generated a social and political storm. Unions have threatened lock-ups if it deepens.

Delphi's woes come as other component makers are closing shop in Spain, hurt by flagging orders from car manufacturers that have shifted output to cheaper production locations in Asia and eastern Europe.

Earlier this month, GDX announced plans to close its Barcelona plant, dismissing 720 workers, in a move unions are also set to oppose.

Delphi's Spanish operations are currently being managed by a local court which took them over when it filed for bankruptcy earlier this year.

Ivan Castano