Spain’s central government and regional authorities in Catalonia and Galicia have been left scrambling to avert imminent plant closures by multinationals Nissan and Alcoa just as the International Monetary Fund (IMF) has downgraded Spain’s economic prospects, with projections that the country’s economic output will crater this year, falling by a record 12.8 percent.
In an update on Wednesday to its World Economic Outlook report report on global economic prospects, the IMF said Spain and Italy are the countries that will be most affected by the coronavirus crisis, with a collapse of economic production on the order of 12.8 percent this year.
Spain’s economy, said the IMF report, is particularly vulnerable due to the combined factors of the spread of the virus and the structure of the economy, which is highly dependent on tourism and retail sales, and an already lean federal budget, with few resources available for the government to come to the aid of the economy.
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The announcement by Japanese carmaker Nissan that it intends to shutter three of its manufacturing plants in and around Barcelona to move production at the facilities to France has jolted national and regional government authorities, who are trying to convince Nissan to remain with a 97.5 million euro incentive package split between the carmaker and its associated manufacturing partners. In addition, Catalan authorities have offered to subsidize the installation of a battery factory in Catalonia that would supply Nissan’s needs in the anticipated transition in Spain and Europe to green, electric vehicles for the future.
In Galicia, U.S. transnational Alcoa Aluminum has said it wants to shutter Spain’s last remaining aluminium manufacturing facility, located at San Cibrao in Lugo province. Alcoa also operates an aluminium oxide processing plant at the site, that would remain open, but the Galician government fears that the planned dismissal of 534 workers at the manufacturing plant could devastate the local economy.
Spain’s central government and Galician regional authorities have offered subsidies to the construction of a sustainable energy plant that would slash costs for the production of the aluminium at the facility over the coming years. But Alcoa officials say that help would only come in the mid- to long-term and not address their short-term recurring losses at the plant caused by the low price of aluminium on the world market, combined with global excess production capacity.
Alcoa workers have been marching continually over the last several weeks demanding that the regional Xunta government of Galicia and the central government produce a solution. So far, the only response from Alcoa has been an invitation to labour federations representing the workers to begin negotiations on the terms of the dismissal of the workers.
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