Renault will invest EUR531m by 2010 to support its factories in Spain which will continue to churn out the Modus supermini and Megane models for global export, a trade union official told just-auto. But the French car giant has begun negotiating a new collective wage deal for the period with which unions are dissatisfied, and consequently could take weeks to be signed.

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The latest capital expenditure is smaller than the EUR564m Renault invested in the 2004-2006 period as the company works to cut costs to stay competitive in the cut-throat global automotive industry.


“We have to do more with less money and we are willing to do this by maximising our productivity in each [factory] line,” said Joaquin Arias Gallego, Renault secretary general at trade union Comisiones Obreras (CCOO).


The funds will finance the next launch phase of the Modus (and the R-77 longer Modus) – whose sagging sales have caused big headaches for Renault –as well as the ongoing production of the Megane hatchback and new Clio.


Renault Spain will also start making a new engine for the Renault-Nissan alliance and a new gearbox for global distribution.

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Renault has said the workload guarantees the future of the Valladolid, Palencia and Seville factories beyond 2010.


But workers are not buying that.


They want Renault to spell out a clearer future for its Spanish business and to replace the Modus with another model before they sign the new wage deal.


“We want a better project and a new car or we are not going to sign anything,” Arias said, adding that Valladolid’s output has fallen sharply because of the poor-selling Modus.


Arias said unions want a pay raise of 1% over the inflation rate and new benefits.


Management and workers have already met 11 times to discuss the matter, he added.


Ivan Castano