Smoke rises over the Nissan factory as workers burn tyres during a protest in Barcelona Emilio Morenatti Emilio Morenatti

WORKERS HAVE BURNT tyres at the gates of the Nissan carmaking plant in northeastern Spain and are preparing for more protests after the Japanese company said it would shut all its manufacturing in the region as it reshuffles its global business.

The decision will lead to 3,000 direct job cuts, which unions say will cause economic ripple effects and impact some 20,000 families in the Catalonia region.

They see it as a sign of more widespread job losses to come and the growing pressure on governments struggling to contain the economic fallout of the Covid-19 pandemic.

Although Nissan had been mulling for months to scale down its production in Europe and other parts of the world, the company is suffering like many other carmakers from a plunge in demand for vehicles.

Reporting a $6.2 billion loss for the fiscal year ending in March, the Japanese giant marked today its first annual loss in 11 years.

Politicians around the world are debating whether and how to bail out a car industry that already won billions in government support a decade ago after the 2008 financial crisis.

Even before the pandemic, the industry was facing major new costs and disruption as companies rushed to develop cleaner cars and raced to roll out innovations like autonomous vehicles. 

Nissan workers burn tyres Emilio Morenatti Emilio Morenatti

Criticism

The Spanish government today criticised Nissan’s move, arguing it would be cheaper for the carmaker to invest in improving its productivity in the region rather than take on the €1 billion cost of the closure.

“We lament this news,” economy minister Nadia Calvino told Spain’s public broadcaster, TVE, adding that the government was seeking more negotiations to “see how to channel this process of find alternative solutions”.

“We think this is a plant that has a strategic value for Nissan,” said Calvino.

Nissan plans to phase out some 3,000 direct jobs by the end of the year, said Juan Carlos Vicente, head of the workers’ committee in Nissan’s main factory in the region after a meeting with company executives.

“They are letting us die,” Vicente told hundreds of colleagues who gathered outside the factory.

He said Nissan had argued that the business was not competitive even if it added a vehicle to its production line, which currently churns out an electric van and a pick-up van.

Nissan workers march during a protest Emilio Morenatti Emilio Morenatti

The plant has been operating well under its maximum capacity for months and workers have been striking since the first rumours of the closure emerged on 4 May.

“We are going to keep our fight, putting in check governments and asking them to support us in reverting this decision,” Vicente told to a crowd that quickly moved to set fire to a pile of tyres.

Reeling from a scandal involving its former chairman, Carlos Ghosn, Yokohama-based Nissan is undergoing a deep restructuring, focusing on China, North America and Japan.

The company is leaving the European market, Russia, South America and North Africa to its French partner Renault; and Southeast Asia and Oceania to Mitsubishi.

Management at Renault was also meeting today with unions about its €2 billion cost-cutting plan.

The plan had been under discussion since before the virus crisis, but the lockdown and looming recession are darkening the company’s outlook.

Unions fear it could lead to thousands of job cuts and factory closures.

Renault is expected to announce the plan tomorrow.

In Spain, a key question is whether Nissan will need to pay back the subsidies it has received from the government for furloughing workers during the pandemic.

The temporary lay-offs were granted under the condition that companies would re-hire the staff after the outbreak, and keep them for at least six months.