Conflict over wage cuts to save Spanish bakery plant
Spain’s two largest trade union organizations are split over accepting sweeping wage cuts in return for saving one of Spain’s largest industrial bakery plants.
Members of the CC.OO (Workers’ Commissions) were advised to boycott a referendum among Panrico workers on Tuesday and start a strike on 23 February.
But the rival UGT (General Workers Union) encouraged its members to vote and agree to the cuts.
They saw it as the only way to ensure the future of the plant at Santa Perpètua de Mogoda and other company installations in the northeast region of Catalonia.
The referendum, which was approved but voted on by only 56% of the staff, was called after the regional government, the Generalitat, stepped in to help mediate in a dispute that threatens the jobs of 630 people.
Panrico, which was taken over last autumn by US investment fund Oaktree Capital, decided to press ahead with the vote despite the continuing opposition of CC.OO.
As a result of the mediation talks, the company said it would keep the bakery running for at least four years if workers agreed to wage reductions of up to 25 %.
Following the vote, the same evening the company signed an agreement with the UGT, but not with CC.OO which has the biggest representation at Santa Perpètua de Mogoda and in the region overall.
The secretary general of the agro-foods federation at CC.OO, Miguel Ángel Domínguez, said his members had already made up their minds.
The union only called off a stoppage planned for December at the last minute to allow the mediation talks to begin.
But, in another vote taken on Saturday (18 February) members rejected the terms set out in the referendum and called for strike action to go ahead.
UGT official Juan Santo said that although the reductions would be “very tough, seeing what there is, within the bad it’s the best (deal) there is.”
The company said it would have to close the Santa Perpètua de Mogoda plant if it did not get agreement in the referendum as labour costs there are 40% higher than in the company’s other 12 plants in Spain and Portugal.
It has also promised to pay out EUR 3.5 million in compensation for abolishing long service payments and to retire early some workers in return for the wage cuts.
The tense situation at the plant was summed up by the longest serving staff member, José Alfaro Padilla, who has spent 43 years there.
As co-chair of the voting procedures on Tuesday 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.”
While CC.OO has the majority of union membership at the bakery, where 374 people were eligible to vote, UGT has more among the 256 employees working in the nine distribution centres in Catalonia.
On taking over control at Panrico in the autumn of 2010, 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.