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VW To Lay Off 9,000 From Troubled SEAT Subsidiary

October 22, 1993

BARCELONA, Spain (AP) _ German car maker Volkswagen AG said Friday it plans to lay off more than one-third of the workers at its troubled Spanish subsidiary SEAT.

SEAT’s acting chairman Peter Walzer said during a news conference that the company’s work force of 23,500 must be slashed by 9,000.

Walzer said SEAT’s 40-year-old Zona Franca factory in Barcelona that employees 13,600 people would stop manufacturing cars. He said production would be switched in 1994 to the new Martorell plant north of the city.

SEAT is expected to lose an estimated $770 million this year, nearly eight times what it lost in 1992.

SEAT helped put the emerging Spanish middle class on the road during the 1960s with its bubble-shaped SEAT 600.

Lately, however, SEAT and other Spanish automakers have suffered.

Overall sales of Spanish-made cars fell nearly 17 percent in the year ending Sept. 30, slightly higher than the overall Western European decline, according to manufacturers’ figures.

Earlier this week Nissan Iberia said it would lay off 1,000 of its 7,000 workers in Spain and freeze wages for the rest until 1995. Other manufacturers are hoping to extend seasonal layoffs.

The layoffs come at a time when Spain is already dealing with unemployment topping 22 percent - the highest in the 12-member European Community.

SEAT’s Zona Franca plant will be converted into an industrial park for component suppliers, Walzer told reporters.

Of the 9,000 to be laid off, 1,400 are temporary employees whose contracts won’t be renewed and 3,000 are older than 55 and will be offered early retirement, Walzer said.

SEAT is looking for jobs for the remaining 4,600 laid-off workers elsewhere in the company and with companies planning to set up shop in the Zona Franca industrial park.

″We are already working on the task of finding new jobs for the affected employees,″ Walzer said.

The Zona Franca area will house SEAT management as well as the industrial park for component suppliers, he said.

The SEAT chairman reiterated that VW planned to inject $923 million into SEAT in 1994. SEAT operates a third automobile plant in Spain outside Pamplona.

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