11,000 Seat jobs under threat: VW expected to close Barcelona factory

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NEARLY 11,000 workers at Spain's biggest and oldest car manufacturing plant, the Seat factory in Barcelona, look certain to lose their jobs in a loss-cutting exercise by the German parent, Volkswagen.

The expected closure of the factory, in Barcelona's so-called Zona Franca industrial zone, could also affect up to 50,000 other workers in 700 companies in related industries.

The news, first reported by the daily El Pais, conspicuously remained undenied by VW or the Spanish government. It came as a big shock to the Catalan capital just over a year after the Olympic Games gave it a massive facelift and moral boost.

It was also disastrous political news for the Prime Minister, Felipe Gonzalez, with unemployment already 23 per cent, and trade union leaders continuing to rebuff his attempts to cut their purchasing power and rights. To complicate matters, Mr Gonzalez needs the support of Catalonia's 17 deputies to push through his budget and other important legislation.

The Zona Franca workers have previously threatened to halt production at Seat's other two Spanish plants, at Martorell in Catalonia and near Pamplona in Navarra, if VW shut the Barcelona plant. They are expected to discuss such action over the next few days.

VW's chairman, Ferdinand Piech is said to have been adamant about the closure during talks this week in both Madrid and Barcelona.

All the more galling, particularly for the Catalans yesterday, was the fact that VW's controversial sales chief, Jose Ignacio Lopez de Arriortua, a Basque, was at Mr Piech's side during this week's meetings. Many Catalans and other Spaniards yesterday speculated that the Barcelona cutbacks were part of Mr Lopez's known 'dream' of setting up a super-efficient car factory in his Basque homeland.

A government spokesman yesterday ruled out further state involvement in the factory.