•    New five-year agreement caters to union demands, renews commitment to employment and guarantees SEAT’s competitiveness.
•    Both parties agree to increase flexibility, improve remuneration and social aspects
•    Salaries results-linked for first time
•    Agreement backed by company’s majority-member trade union UGT

James Muir, Chairman of SEAT’s Executive Committee, Josef Schelchshorn, Vice-president of Human Resources, and Matías Carnero, Chairman of the SEAT Works Committee, this morning signed the company’s 18th collective agreement, to run from 2011 to 2015. The new agreement marks an historic milestone, responding to employees’ social demands as well as entailing a significant increase in SEAT’s competitiveness. The agreement has received the backing of the car company’s majority-member trade union, UGT.

The highlight of the new agreement is the inclusion of flexibility measures enabling the factory to cope with future increases in production demands. The number of additional weekend workshifts thus increases from 39 at present to a maximum of 42 with six shifts. It also creates the possibility to add additional shifts so as to keep the production facility running for 328 days of the year when needed.

This measure not only increases SEAT’s competitiveness, but also contributes to the company’s strategic goal of saturating production capacity at the Martorell plant. It also renews the commitment to employment and opens a window of opportunity for the creation of new jobs.

After the meeting James Muir, Chairman of SEAT’s Executive Committee, declared “we are satisfied with this historic agreement for the company. Our employees have offered an example of maturity, understanding that an increase in competitiveness is predicated on labour flexibility as well as modernizing and integrating new items related to the company’s financial results”. SEAT’s President also remarked that, in spite of the current economic recession in Spain, the company had generated roughly another 1,000 jobs by the end of 2011, thus taking the number of professionals currently employed in the SEAT Group to 14,000.

The new agreement also provides for an additional five positive days to be added to the ‘hours pool’ of all workers, on the signing of the document.

Additional salary and increase in purchasing power

The document agreed on by both parties improves both remuneration and social aspects. In addition to guaranteeing the purchasing power of employees in any situation (real CPI), the new agreement provides for additional remuneration depending on improvements in SEAT’s results, so that employees can thereby participate in the company’s successes. Thus, in the event of a positive operating result, employees would receive an additional payment of up to 500 euros per year if the objectives established for three variables - operating result, productivity and quality - were reached.

If a financial year were to have a negative operating result, remuneration could also increase above the real CPI, depending on improvements over forecasts. The agreement also introduces a new system so that employees may distribute part of their total salary under items which would increase their net annual remuneration, and also broadens remuneration categories and levels.

According to Josef Schelchshorn, SEAT Vice-president for Human Resources, “we have successfully negotiated a ground-breaking, modern, exacting new agreement. It has four key axes – salary increase, production flexibility, performance assessment and a social benefits plan”. Schelschshorn added that “we are more competitive thanks to the increase in production flexibility; at the same time, our employees maintain their purchasing power. With the new agreement, the SEAT workforce will be oriented to achieving objectives”.

After signing the agreement today SEAT management will give each employee covered by the agreement a one-off payment of 250 euros.

Improved work organization and greater social benefits

The agreement struck between SEAT management and the intercentres works committee includes other significant improvements responding to the need to modernize relations between both parties and improve the work-family tandem. Noteworthy elements are a partial retirement scheme with replacement contracts, a company contribution to the employees’ pension fund, and a car leasing scheme for the duration of the new agreement.

For his part, Matías Carnero, Chairman of the SEAT Works Committee, highlighted the fact that “in spite of the current economic situation, this new agreement has provided the entire workforce with stability. At a time when many sectors are introducing wage freezes, this agreement provides for additional remuneration depending on improvements in SEAT’s results, as well as a social benefits plan - both ground-breaking developments in our sector”.