Spanish car maker Seat will dismiss up to 1,500 workers or 9% of its 16,000 workforce by 2010 to cut costs in the increasingly competitive global automobile market, a trade union leader confirmed to just-auto on Friday.


Unions expect the Volkswagen‘s Spanish subsidiary to dismiss 1,300-1,500 workers across manufacturing, sales and other divisions, said Matias Carnero, who heads Seat’s workers committee for the top Union General de Trabajadores (UGT).


He said the redundancies will be achieved through early retirement and voluntary departures. Workers aged 58 by 31 December, 2007 will leave the company when they are 60. They will receive a minimum compensation package of 34 months pay, based on 86.5% of their salary. For those who decide to leave early, Seat will pay a maximum of EUR144,000 to factory managers with over 30 years seniority, Carnero noted, and less to lower-ranked workers.


He said unions are still considering the measures and will meet Seat’s management to discuss the redundancies on 22 March.


Carnero said unions will demand that Seat introduce its previous ‘relay contracts’ that allow young workers to replace ageing staff. The company froze those contracts as part of a restructuring programme to build a ‘new Seat’ which began to show results last year. Workers’ reps say Seat can trim operational expenses by improving raw material procurement and commercial activities – instead of reducing headcount.


“Why can’t they look for efficiencies elsewhere?” asked a union official. “They’ve already made workers’ lives hard enough and their sales are improving.”


Hurt by slumping sales and cut-throat competition, Seat laid off 645 workers from its key Martorell factory in 2005. It has since re-hired approximately 520.


Ivan Castano