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GM Workers in Spain Accept Wage Freeze to Boost Competitiveness

April 9 (Bloomberg) -- General Motors Co.’s workers at its auto-assembly plant in northern Spain accepted a two-year salary freeze as part of a labor deal aimed at boosting competitiveness against other European factories.

The roughly 6,000 employees at the plant near Zaragoza won’t get a wage increase in 2013 and 2014 as part of a five-year collective bargaining agreement that was voted on yesterday, Pilar Guridi, a Madrid-based spokeswoman for GM’s Spanish division, said today.

The agreement should help the Zaragoza plant be “part of the company’s investment plans and allotment of new models,” the carmaker said in an e-mailed statement.

GM’s European operations, which consist primarily of Ruesselsheim, Germany-based Opel and its British sister brand Vauxhall, have accumulated losses of $18 billion since 1999. The Detroit-based company, which plans to shut a factory in Germany to save costs, aims break even in Europe by 2015.

Salaries at the Spanish plant, which makes the Corsa subcompact and Meriva small van, could rise as much as 1.5 percent starting in 2015 and will be reviewed in 2016 and 2017 based on potential profit at GM in Europe, Guridi said. Almost 65 percent of workers participating in the ballot voted in favor of the agreement, she said. About 67 percent of the plant’s staff participated in the ballot.

As labor costs fall and Prime Minister Mariano Rajoy’s legislation makes it easier for companies to cut wages and reorganize staff, carmakers including Ford Motor Co., Renault SA and PSA Peugeot Citroen are boosting production in Spain. The government is also offering incentives for drivers willing to part with with their old vehicles after car sales in the country dropped 13 percent last year.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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