Renault Reaches Agreement With Labor Unions in Spain

MADRID – After reaching an informal agreement with its Spanish unions, French auto maker Renault decides to assign future vehicle production to its Spanish plant that would maintain the current employment level for 10 years.

The final agreement has yet to be announced, but sources say Renault’s new industrial plan will make it possible to manufacture more than 400,000 vehicles annually at the auto maker’s Valladolid and Palencia assembly plants, plus 1.4 million engines at Valladolid and an equal number of transmissions at its Seville facility.

In return, Renault Spain was able to cut the number of “relay (temporary) contracts,” demanded by the union to be made permanent.

Labor wanted 1,200 workers made permanent, but the auto maker reduced the number to 800. They will receive 72.5% of the normal salary during their first 18 months of employment. The unions were asking for one year.

Renault’s French and Turkish plants are competing with Spain for new production plans as well. Jose Vicente de los Mozos, CEO of Renault Spain, warned the unions here at the beginning of negotiations that the Turkish factory in Bursa has an economic advantage.

“The production cost in Bursa is €400 ($513) less per vehicle than that in the Palencia plant in Spain,” he said.

The Renault Spain agreement has been signed by UGT and CCOO, two of the major unions with a presence in the auto maker’s plants.