SPAIN-ECONOMY: Unions Slam ‘Just in Time’ Production System

By Tito Drago Reprint | | Print |

Tito Drago

MADRID, Feb 18 1997 (IPS) - The truckers strike that has brought Spain’s economy to a standstill and pushed 60,000 workers onto unemployment insurance has led unions here to criticise a production formula known as “just in time” adopted by many businesses.

The “just in time” system consists of maintaining the lowest possible stocks, while factories buy only the raw materials and parts needed for short periods and production is in accordance with the orders received.

Due to that system, several transnational plants operating in Spain began to feel the effects of the strike a mere 48 hours after it began 13 days ago.

By Tuesday, 60,000 workers had been temporarily laid off, meaning a cost of one and a half million dollars a day in unemployment benefits doled out by the National Employment Institute.

The companies hardest hit by the impossibility of receiving raw material and parts are carmakers, mining and steel and ironworks.

Five transnational carmakers account for the lion’s share of the workers temporarily receiving unemployment benefits: the German firms Volkswagen and Opel, with 17,650 and 9,300 suspended from their jobs, Renault and Citroen from France, with 14,700 and 7,700, and the U.S. carmaker Ford, with 8,160.

A majority of the workers laid-off are in the northern regions of Cantabria, the Basque country and Navarra.

The truckers began to negotiate with authorities on Monday.

The Labour Confederation of Workers Commissions (CCOO), one of Spain’s two main trade union organisations, argues in a communique issued this week that the temporary lay-offs cannot be justified as a result of “dire necessity.” If they are, the State has to foot the bill, and workers receive benefits that total less than their salaries.

The union contends, instead, that the organisational weakness of the companies that have opted for the “just in time” formula is to blame.

If the cause of unemployment is deemed unjustified by the Ministry of Labour, the company has to continue paying the workers’ full wages.

The CCOO argues that the “just in time” system introduces elements of precariousness and difficulties in re-supplying companies. The union further contends that the high volume of parts imported from abroad is a key part of the problem.

If the temporary lay-offs are accepted as justified, those already receiving benefits will be the ones to pay, the union maintains, because unemployment funds will be unable to stretch out that far.

Meanwhile, those who smuggle tobacco into Spain, mainly through the estuaries of the northwestern province of Galicia, do not appear to be bothered by the strike. The daily ‘El Pais’ reported Tuesday that the price of cigarettes has risen by 50 percent. An impossible “solution” for carmakers.