Spanish vehicle maker Santana Motor will have a hard time surviving if it breaks ties with Suzuki for which it builds several vehicle models in Spain.
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According to a study by the Jaen, the Andalusia economic observatory, Santana’s survival hinges on maintaining its manufacturing relationship with Suzuki even though the company produces its own four wheel drive Santana model.
“Santana needs other products to survive” Suzuki’s contract expiration date of June 30, 2006, the study claims.
Spanish unions have rejected that view, however, saying that Santana is preparing an ambitious restructuring plan that could very well guarantee its independent success.
The plan, backed by Santana’s big shareholder, the Andalusian government, will be revealed later this month, unions said. It envisages turning Santana into a profitable “multi-product” independent company by 2008.
Although the firm could survive without Suzuki, management is open to increasing its ties with the Japanese group.
“We think it’s too premature to say whether Santana can be completely independent until we see the plan,” a Santana workers’ committee official told just-auto. The initiative must preserve and increase employment rates and facilitate the entry of new industrial partners.
A Santana official confirmed a viability plan is underway but would not comment further.
Santana employs 600 workers and makes 24,0000 cars, including the Santana and Suzuki’s Anibal and Jimny, annually at its Linares, Jaen plant.
But there is mounting concern that workers – and another 400 employed by suppliers – could lose their jobs when the Suzuki deal ends. However, there are ongoing negotiations to renew the assembly contract until 2008, unions said.
Ivan Castano
