VW May Build Next-Gen Polo in Spain

MADRID – Volkswagen signals to the works council at its Landaben plant, near Pamplona, it is considering investing €785 million ($1.02 billion) over five years there to produce the next-generation Polo.

Most of the money would be spent to retool the plant for the new model.

In exchange for the investment, the German auto maker wants reductions in labor costs and improvements in shift-schedule flexibility.

Analysts say VW is looking for an immediate reduction in pay to bring the plant in line with concessions made recently at SEAT, Renault and Nissan plants in Spain.

Volkswagen will produce 262,610 vehicles, all Polos, in Landaben this year, 25,000 units fewer than in 2011.

To win the new-model work, VW wants the works council to accept an increase in the work-days pool from plus or minus seven days to plus or minus 15. It also is seeking more flexibility in holiday work schedules.

Currently, Landaben operates 211 days per year, meaning if the new deal is adopted work days would range from 196 to 226, depending on demand for the Polo.

The work-days pool allows employees to continue to be paid when the plant is shut down. In return, they work without additional pay when extra shifts are needed.