PSA wants the Vigo plant to cut wages in order to win new models

The series of small vans from the PSA Peugeot Citroën Group have been built in Vigo for years, but things could change since the group’s new head, the Portuguese Carlos Tavares, took over. Months ago he announced that models would no longer be allocated to plants for historical reasons, but that each plant’s profitability would be assessed instead.

And that is where the problem lies: the Vigo plant has to compete with the Slovak factory in Trnava. Vigo employs 7,000 people (it is the largest outside French territory and one of the most profitable in the group), but of course wages are not as low as in Trnava.

An hour’s work in Vigo is paid at 22 euros, in Slovakia at 10 euros. It is true that in Vigo the pay of new contracts bears little resemblance to the conditions that once applied, but even so it does not seem enough, and management at the plant has pointed to a (very substantial) pay cut in order to compete for the new generation of K9 vans.

The plant’s director in Vigo, Yann Martin, proposes: 3,000 euros less per year (a 5% cut in base salary), a 50% cut in the extra payment, a pay freeze until 2019, a 33% reduction in the target bonus, 10% less seniority pay and a 50% cut in the allowances for night work, third shifts and Sundays and public holidays.

These proposals have been immediately rejected by the various unions, including the Independent Workers’ Union (SIT). Among the various unions, some even believe the decision has already been taken and that the aim is merely to cut costs.

The tug-of-war between the works council and plant management is not simple, but it is certainly important to secure production of the vans, not to mention the importance of the plant in Vigo.

What do you think? Is management really bluffing, as some union sources suggest, or is the situation more serious, and does the plant really have to tighten its belt so as not to lose the K9 model?

Source | Own elaboration, El País

Photo | Motorpasion.com