June 21, 2007 -- Nissan Motor Iberica has announced that it plans to reduce costs by 12% at its Barcelona facility, according to terra.es. In order to achieve that, José Vicente de los Mozos, the company's general director, aims to increase working hours of the Spanish subsidiary and eventually 700 temporary jobs may not be renewed. He stated that annual working time at the Spanish subsidiary is about 100 hours lower than the average in the automotive sector, while salaries are higher by about 15%. In this regard, Mozos has met representatives of the Barcelona plant to talk about the necessity to reduce costs over the next three years. He also stated that if the plant's productivity does not increase, besides non-renewal of the temporary contracts, night shift of production line of the Pathfinder and Navara models will be cancelled as well as production shift of 5,000 to 10,000 units to Thailand.

Another objective of Nissan with regards to the Barcelona facility is to reduce labour absenteeism, which is around 6.5%, compared to 2% in Mexico and the United Kingdom and 1% in Japan.Significance: This is aimed at increasing the company's competitiveness, assigning production of a new light commercial vehicle (LCV) to the Barcelona plant and guaranteeing the future of this facility as well as jobs in the medium term. The Barcelona plant has been waiting for assignment of production of the new LCV for some time now, going into production at the beginning of 2009, competing against two other factories in the United Kingdom and Turkey. Nissan's announcement goes along with the general strategy of all the major vehicle manufacturers aiming for higher labour flexibility and further cost reduction. Nissan has another production facility in Avila, which earlier this year announced an output increase of LCVs to about 40,000 units in the future (see Spain: 28 February 2007: ). Nissan's plant in Barcelona has managed to reduce manufacturing cost by 31% over the past three years and has also put in place extra measures to boost output.

Source: Global Insight Daily Analysis
Source: Factiva