Nissan will close its Madrid Cuatro Vientos engine plant and dismiss 400 or nearly 8% of its workforce to restructure its business in Spain, just-auto has learned.

Nissan workers' committee chief Villaverde Florez said Friday that he expects Nissan to lay off about 300 workers and transfer another 100 to other Spanish plants.

The move is part of Nissan's plans to close the Madrid site in June 2006 and transfer production to the Barcelona Zona Franca factory where it plans to assemble new versions of its Pathfinder SUV and pickup truck, Florez said.

The Cuatro Vientos site makes four different types of Nissan sedan and minivan engine. It will begin making two versions of the new YD25 engine in December 2005 to power the Pathfinder and pickup. It will then shift YD25 output to Barcelona in summer 2006. The company will phase out the other three Cuatro Vientos motors because "they don't meet European emission standards," Florez said.

Despite the announced strategy, Nissan has yet to explain the exact benefits of idling Madrid.

"Is there a feasible reason?" to close the factory, Florez asked. "This plant is a profitable and efficient plant within Nissan and we don't understand why they have to close it. This is not about economics and there's a bigger picture behind this but they won't tell us."

Florez said unions are pressing for the Madrid government to schedule a three-party meeting with Nissan to hear an explanation.

Nissan did not immediately return calls from just-auto.

There is speculation that the Japanese multinational is closing Madrid to sell the highly valuable 287,000 square metre site to real estate developers.

In 2003, Nissan churned out 84,000 engines from Cuatro Vientos. The Zona Franca site, which makes the Nissan Primastar and Tino minivan models among others, made 90,000 vehicles.

Ivan Castano