Plan to save Spanish bakery plant

Following a major showdown between Spain’s two largest trade union organizations, a plan has finally been approved to save one of Spain’s largest industrial bakery plants in return for swingeing wage cuts.

 

Members of the CC.OO (Workers’ Commissions) were advised to boycott a referendum among Panrico workers in the Catalonia region on 21 February and to go on indefinite strike two days later.

But the union eventually called off the stoppage, recognizing that any such action could be construed as “illegal”.

CC.OO acknowledged that the rival union organization, UGT (General Workers Union) had signed the new agreement with Panrico on the same day the vote was held and that UGT had the “legal majority” in having more members on the inter works’ committee.

As a result, it said its “hands are tied”, although CC.OO maintained it was a pity the UGT had not supported their plan to take the whole issue to a labour tribunal to try and organize a joint agreement between the union groupings.

The vote, which had been supported by the UGT, saw 89.5% of those taking part in favour of a plan mediated by the Catalonia regional government.

It was aimed at avoiding a closedown that would have seen more than 460 workers laid off, most of them at the main bakery at Santa Perpètua de Mogoda.

CC.OO pointed out that only 56% of the staff actually voted in the referendum, and that it had the biggest representation at Santa Perpètua de Mogoda and in the Catalonia region overall.

Rival arguments have spoken of wage cuts of between 15% and 25% being introduced, as the company buys out long service agreements and other extra payments.

Panrico, which was taken over last autumn by US investment fund Oaktree Capital, decided to press ahead with the vote on working conditions despite the continuing opposition of the CC.OO.

As a result of the mediation talks involving the regional government, the company said it would keep the bakery running for at least four years if workers voted to agree the reductions.

In the lead up to the referendum, the secretary general of the agro-foods federation at CC.OO, Miguel Ángel Domínguez, said his members had made up their minds when they called for a strike.

UGT official Juan Santo said that although the reductions would be “very tough, within the bad it’s the best (deal) there is.”

The company itself said labour costs at Santa Perpètua de Mogoda were 40% higher than in the company’s other 12 plants in Spain and Portugal.

Apart from guaranteeing the bakery’s future for four years, the company also promised to pay out EUR 3.5 million in compensation for abolishing extra payments and to retire early some workers.

The tense situation at the plant was summed up on voting day by the longest serving staff member, José Alfaro Padilla, who has spent 43 years there.

As co-chair of the voting procedures he said: “I’ve experienced quite a few strikes and tense situations, but today the ambience is very strained.”

One worker quoted by a Spanish web page said the wages currently being paid were not the drain on competitiveness that the owners were claiming.

“I earn EUR 1,300 euros (a month) and I would end up with 1,000. The losses (reported by the company) are for all of the group, not just for Santa Perpètua de Mogoda.”

On buying up the majority share at Panrico in the autumn of 2011, Oaktree Capital said it was also looking for staff lay-offs at plants at Paracuellos de Jarama (near Madrid), Seville and Murcia.

It replaced another investment fund, the UK’s Apax Partners, which was ousted after five years in mid 2010 after failing to keep up with repayments of loans to a group of creditor banks led by Dutch giant ING.

Oaktree Capital said at the time that it was prepared to invest some EUR 110 million in Panrico once it got its viability plans agreed with workers.

With a total staff of nearly 2,200, Panrico reported annual losses of EUR 225 million in 2010 following a EUR 154 million deficit the previous year.

The company’s sales have been badly hit by consumers switching to own label products as a result of the economic crisis, falling by 12% to EUR 381 million in 2010.