Car manufacturing
Business 22/09/2021

Seat agrees to furlough that will affect between 482 and 1,276 workers a day until June

The lack of semiconductors forces a reduction in production despite the high demand for some models

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The Seat factory in Martorell.

The temporary layoff plan (ERTE) that Seat will implement as of September 27 due to the lack of semiconductors will affect a minimum of 482 workers and a maximum of 1,276 daily, depending on the supply of these materials. These are the numbers that have been agreed by the management and the unions in the negotiation of the ERTE, the second at the car manufacturer to address the lack of microchips. It will last, in principle, until June 30, 2022, as reported by Seat sources.

The negotiation between management and unions closed on Wednesday and will apply to all of Seat's production centres. The scheme is presented as a "dynamic" measure, although the main impact will be in the Martorell plant, where the daily impact will be between 322 and 1,076 employees.

Line 1 of the plant, where Seat Ibiza and Seat Arona are manufactured, will reduce its production by half a shift (from 2.5 to two) in a structural way, while line 3, where Audi A1 is assembled, will have its usual planning of one shift. Line 2, where Seat Leon and Cupra Formentor models are manufactured, will adapt to the availability of semiconductors at all times and will be able to work in 3, 2.5 or 2 shifts. Workers will be asked to volunteer for the scheme. If not enough volunteer, it will be topped up by rotation among remaining staff.

Company sources have explained that a very dynamic system has been sought to adapt to the evolution of supplies at all times, since it is a different situation from previous cases, when production stopped because there was an excess of stock. The difference is that the company wants to manufacture as much as possible and the stops are due to the lack of components, a crisis in the global supply of semiconductors and microchips that sources in the automotive industry say will continue for the remainder of the year and throughout the first half of next year.

The maximum number of Seat workers who will be on furlough at some point will be just over 11,000, according to union sources, who believe this scenario is unlikely because El Prat and Zona Franca plants also work for other Volkswagen group brands, and this production ought not be compromised. It has also agreed a social plan that, among other things, will offer employees the possibility of training in electric cars while maintaining 100% of their salary. In addition, workers over 55 and those who have not yet generated the right to unemployment benefits are excluded from the layoffs.

12.000 cars in August

The shortage of semiconductors, which is impacting the entire global automotive industry, has already caused the Martorell plant, the main car factory in Spain, to close for several days in recent months. For much of this year, Seat's management has been able to manage the reduction in production due to the lack of microchips by resorting to labour flexibility, but the company has had to resort to furlough due to the duration of supply problems, as explained by sources in the company.

Last spring's ERTE dealt with a similar situation and ended on May 30. It affected about 550 workers. Seat has stressed that the demand for Seat and Cupra models is at precovid levels, which means that despite the ERTE it will "manufacture the maximum possible number of vehicles, depending on the availability of semiconductors". In fact, the Martorell plant opened in August for the first time in its history, which allowed it to recover part of the lost production during lockdown. Seat president Wayme Griffiths said 12,000 vehicles were assembled that month.

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