PSA’s Spanish Van Plant Pushes for Wage Cuts

MADRID –  Management at PSA Peugeot Citroen’s largest Spanish plant, in Vigo, is asking workers for pay cuts in order to secure production of the revamped Citroen Berlingo/Peugeot Partner vans, codenamed K9.

Because of the size of the new vehicle program, only two plants would appear to be likely candidates for the program, Vigo in Northwest Spain, which builds the models now, and the PSA operation in Trnava, Slovakia. Planned volumes for the K9 are set at 200,000 units annually.

A small satellite plant in Mangualde, Portugal, also builds the current Berlingo and Partner, which get mostly cosmetic changes under the K9 redesign.

Vigo management is asking for a 5% cut in wages and a salary freeze extending to 2019, plus an up to 33% reduction in wage bumps that go to high-seniority workers and night or third-shift employees and for weekend overtime.

The goal is to reduce hourly wages from €22 ($28) to €19 ($24), bringing labor costs somewhat more in line with PSA’s Portugal and Slovakia plants. Wages at the Trnava facility are closer to €10 ($13) per hour.

So far unions have rejected the demands.

After a shutdown during the last week of October to control inventories, production resumed at Vigo this week but at a slower rate, with Berlingo/Partner output at 35 units per hour, down from 42.

Union sources appear confident Vigo already has been designated the site for the new Berlingo/Partner within PSA and say plant management simply is looking for additional savings that can be put toward CEO Carlos Tavares’s goal of cutting overall spending at the French automaker by €1 billion ($1.3 billion).

One union is threatening to strike if Vigo management does not back off from its push to cut wages.

The K9 is expected to go into production in second-quarter 2017 at the Vigo plant, according to WardsAuto data.