In just a few days, three relevant news items for the European automobile sector have coincided. The Volkswagen brand announced the closure of three factories in Germany with “tens of thousands” of layoffs – the first decision of this type in its 87-year history – the week in which European Union tariffs on electric cars came into force. imported from China. A rate that in the case of the Cupra Tavascan model, which Seat manufactures in Anhui in collaboration with the Chinese group JAC, is 20.7%, which is added to the previous 10%. The measure has set off alarms in the Martorell (Barcelona) company, whose profit until the third quarter has dropped by 17%, because if it does not sell electric vehicles, it will have to reduce the production of combustion vehicles to meet C02 objectives. .
elDiario.es talks about all this with Matías Carnero (Barcelona, 1968), president of the UGT of Catalonia, of the Seat inter-center committee and the first Spaniard to sit on the Volkswagen Supervisory Board, the group’s highest control body, in which in addition to the shareholders (10 members) representatives of the workers participate (with another 10 seats), following the German co-management model. Carnero started working at Seat in 1987 as an assembly worker when he was 19 years old.
What is happening at Volkswagen?
What is coming in Germany at the moment is a tsunami because Volkswagen needs a good restructuring; He has great muscles, but with a lot of fat.
Are we talking about the Volkswagen brand and not the rest of the consortium’s brands and only in Germany?
Yeah. We are talking about the VW brand in Germany, with 120,000 workers. Two questions arise. The brand’s structural costs must be lowered in order to be competitive in the face of the investments that must be made in the coming years to launch electric cars. The possibility of closing three small plants in Germany is on the table, but it will not be enough and that is why there is also talk of salary reductions of 10%, of reducing the structure… and without taking into account the closure of the factory. Audi in Brussels. We send our solidarity and support to our colleagues in Germany because it is a complex solution that will have dramatic parts, hopefully it can be carried out with voluntary departures.
You are on the world committee. How did VW get into this situation?
If we go back we see how the rest of the brands in the consortium have been restructuring their workforces, in some cases with major reconversions. In the case of Seat in 2001, in 2005 in 2010 and now, the last one, during the negotiation of the last collective agreement, we agreed to reduce almost 10% of the workforce to adapt to the necessary volume that we expect to have from 2026. At Seat the The work has already been done and I think we have done it correctly, in the long term, so as not to have a catastrophe like in Germany. And at VW they have done the right thing. It is not a reproach, we all know that VW is the parent company and that it is harmed as little as possible.
When during the Covid crisis there was the distribution of semiconductors because there were none, at Seat we suffered many inactivity problems. On the other hand, VW has also suffered from high turnover of presidents and important changes in management. Three presidents in three years. But we must look forward and seek the necessary agreements to be competitive, and especially now, with the great penetration of Chinese and Asian brands in Europe. VW has to get its act together because if not, it’s going to have a bad time.
The Volkswagen crisis is a warning to sailors for the rest of the European brands, for the Stellantis group, for Renault, Mercedes or BMW
Do you rule out cost reduction and adjustment measures reaching other brands of the consortium and other countries, such as Seat and VW Navarra?
[pausa, silencio] It’s complicated because the world moves very fast. Today I don’t see that risk, but I don’t know if tomorrow some thinking mind in the Group says that this must be extrapolated to other brands. Right now I don’t see any problem in the Iberian region [Seat, VW Navarra y VW Portugal]. Seat and Cupra have other concerns beyond the restructuring in Germany.
What concerns?
On the one hand, the introduction of tariffs on the Cupra Travascan, which we manufacture in China. And secondly, the lack of measures and investments from the Government in infrastructure and direct aid to citizens for the purchase of electric or hybrid cars. If anyone thinks that because Tavascan is made in China it cannot affect employment here, they are wrong; It affects us greatly because to meet the CO2 objectives, if the planned units are not sold, we must compensate and reduce those of combustion cars to reach the CO2 level. It is a correlation, today we can manufacture 500,000 combustion units in Martorell even if there are penalties from the EU, but if we stop selling electric cars – in our case the Tavascan – because the tariffs make them more expensive, we will have to reduce the production of electric vehicles. combustion. We are not a Chinese brand, the design, development and investment are made from Spain, but we are in a joint venture with a Chinese company for manufacturing and subsequent sale. I trust that the EU will understand this and lower the tariff further.
What could be the impact on production, employment and results?
As the president of Seat said [Wayne Griffiths]production and sales in the planned volume of the Cupra Tavascan, of around 70,000 units per year, could generate a negative impact of up to 500 million euros due to the unforeseen cost overrun when the new model was planned.
And in employment?
You have to calculate it well, but several hundred jobs, between 600 or 700 people, regardless of the external temporary workers who are working at this time. We are talking about a production of 410,000 units compared to the more than 500,000 cars that we are going to manufacture this year.
Are management already talking to the works council to address this surplus?
The tariff may go down over time and I have hope that this will happen, those responsible for Seat are doing a great job in this regard before the European Commission. But we are starting to talk about it, yes, management has to analyze the impact between the sales and costs of electric vehicles, on the one hand, and those of combustion on the other so that the fines do not eat into the profits. I think we have enough tools to be able to adapt, but there is certainly a volume of production that we will not be able to manage with internal flexibility alone. And I insist: if the Government does not take measures in infrastructure and with purchase aid so that the electric vehicle takes off, the forecasts we have for manufacturing the group’s small electric vehicles in Martorell and Pamplona will also go down.
The European industry has no plan B.
Exactly, we only consider hybrid or electric cars, nothing more. The VW crisis is a warning to sailors for the rest of the European brands: the Stellantis group, Renault, Mercedes or BMW.
We have just learned SEAT’s quarterly results: it sold more, but earned less because more affordable cars, which leave less margin, rose. Are you worried?
We sell more affordable cars and there is a lot of competition, which means spending a lot on marketing. And we must also keep in mind that many investments in technology are not reflected in the final price of the car so as not to make it more expensive. In recent years we have had very good results, but now things are going to change because in 2025 we are going to produce less than this year, below 500,000 units, and we will work less. Due to a matter of internal organization, having unified two lines to make three models, means that every day we manufacture 400 fewer cars, which at the end of the year is many thousands of cars. And all this without taking into account a possible drop in production motivated by the tariff, so it could go further. We will see how it evolves, but the next three years will be complicated and if the case arises, we will agree with management on the best measures to be able to move forward.
Are you worried about the future of the Seat brand?
This is the great debate there is. I had big confrontations when the president of the Group was Herbert Diess because I told him that he was lying to a country, to the President of the Government and to the Seat staff when he said that Seat had a future because it was going to be electrified. Today we continue the same. But now we have time and we have to earn money so that we can electrify part of the range of combustion products, especially the Ibiza and Arona models. If not, we will reach a point where Seat will be residual. But Seat has a future and we must value the historical importance that Seat has for Spain. The VW group owes it to the Spanish people and the brand.
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