Business 15/09/2021

Semiconductor crisis triggers new furloughs at Seat, which could affect up to 11,000 employees

Furlough would begin on September 27 and would last until June 2022

2 min
Seat employees leaving the Martorell factory.

The shortage of semiconductors and microchips suffered by the main car manufacturers, which at some point in the last year has forced them to stop production, has led Seat to propose to unions a new furlough plan (ERTE) that could affect up to 11,000 employees, who are those working in the production area. As confirmed by the company, the furlough would start on September 27 and would last until June 30, that is, 9 months.

Initially, the file will be voluntary and its conditions and the staff it will affect will be specified in negotiations with the unions. The next meeting is expected to take place this Friday. Seat's intention, however, is to implement flexibility measures in the three plants it has in Catalonia (Martorell, Barcelona and El Prat) that would involve a temporary reduction of part of the production and a possible cancellation of shifts.

This is the company's second furlough due to the lack of semiconductors and microchips: around 300 workers – originally expected to be up to 500 – were put on furlough between January and May. Since mid-June, however, Seat has once again been suffering from a lack of supplies. The reason is the increase in covid outbreaks in several Asian companies, the main producers of semiconductor, which has forced them to close factories. Initially Seat dodged the lack of components by paralysing or reducing some production lines in exchange for the affected workers' holidays, but as the situation is getting worse and is expected to last for months, the company has finally opted for a new furlough scheme.

"The global shortage in the supply of semiconductors has forced us to adopt new flexibility measures," insisted the company's human resources and organisation vice-president, Xavier Ros. A Seat spokesman also recalled that demand for both Seat and Cupra models is already at pre-pandemic levels.

At the motor show held last week in Munich, the president of Seat, Wayne Griffiths, warned that the semiconductors crisis would have "a big impact" on the company's bottom line this year. That is why he said Seat must now prioritise plug-in hybrids and the launch of the Born, a 100% electric model.