Car companies poised to grow in Spain

• Tweet

MADRID, Dec. 28 (UPI) -- Automakers in Europe said they would spend about $2.64 billion expanding plant capacity in Spain in 2013, offering hope to a struggling economy.

The New York Times reported Friday that Ford Motor Co. and Renault recently announced expansion plans for Spain that would add investment dollars and jobs to Spain, where the unemployment rate is 24 percent.

Without a nationwide automobile workers union, each automaker in the country negotiates individual compensation packages for hourly workers. That has allowed labor costs to remain competitively low, the Times said.

Labor costs in Spain are about 40 percent lower than they are in Germany and France, which are Europe's other major auto-making countries.

Since 2008, unit labor costs, a measure of the cost of production, fell 4 percent in Spain. Partly as a result of that, the Spanish Automobile and Truck Manufacturers' Association predicted automobile production in Spain would rise 11 percent in 2013 to 2.2 million cars and trucks.

The European Commission's data agency Eurostat said labor costs for automakers in Spain were $27 per hour, compared with $39.73 per hour in Germany and $45.14 per hour in France.

"We have lost some jobs but it has been a proud resistance compared to the massacre in some other (work) sectors," said Manuel Garcia Salgado, the head of the automobile division of the Union General de Trabajadores.

"I don't want to give lessons to anybody but at such a delicate moment for Spain, showing that we believe in flexibility and consensus has certainly been highly valued by the carmakers," he said.