Blog: Dave LeggettNissan in Spain

Dave Leggett | 20 June 2007

Spain has become a relatively rich European country in recent decades. It's economic progress has been impressive. It attracted plenty of investment from companies attracted to its low costs and new transport infrastructure. But economic progress and rising incomes has made it relatively less attractive on cost grounds. It's a tricky one for all concerned - just look at the difficulties Volkswagen has faced in Spain, lately.

There's a warning for the countries of Central Europe, too. Wages are still low compared to Western Europe but they are rising and some manufacturers and suppliers looking for low costs will be increasingly looking further to the east - Romania, Bulgaria and even Belarus (someone last week told me that it is not at all the primitive place people often expect it to be and that Minsk has a newly affluent vibe) and Ukraine.

It looks, though, like Nissan is keeping the pressure on Spanish unions with the threat that production could be moved to Thailand if a deal in line with its global cost structure isn't agreed.

For all parties, the sweet spot that leaves everyone happy (the vehicle maker happy that it can stay in Spain at acceptable cost and avoid relocating production; the unions happy that concessions it makes on conditions have retained jobs; and the local municipality happy that it hasn't lost a major employer) is the difficult point to find.

This one sounds like it is heading for an agreement though. The manufacturer sounds tough with the relocation threat, but actually wants longer shifts and reduced absenteeism rather than to cut wages.

EXCLUSIVE: SPAIN: Nissan may move some assembly to Thailand


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