October 23, 2020

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    Nissan Motor has estimated the shut down of its plants in Barcelona could cost up to around 1.5 billion euros ($1.7 billion), a union source informed Reuters on Monday.

    The cost of the shut down is at the heart of a debate in Spain over the move, with the Spanish government saying it would be less expensive to keep the plants operating.

    A Nissan spokesman refused to comment.

    The decision to quit Barcelona was declared by the Japanese automaker last week as part of a turnaround plan, causing protests by workers and a commitment by Madrid to do all it can to convince the company to stay.

    Barcelona-based La Vanguardia newspaper previously on Monday mentioned Nissan documents as saying the closures could cost 1.45 billion euros, mainly to make around 3,000 employees redundant.

    The union source stated that a few weeks ago Nissan had informed workers that closing the three Barcelona facilities could cost around 1.5 billion euros.

    On May 28, the day the shutdown was announced, a Nissan executive told employees the cost could be much lower, at 700-800 million euros, the source added.

    However, the source, together with another senior union official, stated the second estimate was probably unrealistic as that would barely cover redundancy payments to employees, some of whom have been hired for over 20 years.

    Apart from that, Nissan would face other costs associated with suppliers and dismantling factories, the first source said, adding: “1.5 billion euros is more realistic. It’s not easy to dismantle a factory”.

    La Vanguardia stated that among the costs Nissan had estimated were 600 million euros for removing workers, 310 million in financial costs and potentially repaying 100 million of public aid.

    The automaker believes it would take about seven years to recover in savings the cost of leaving Barcelona, the newspaper noted.

    Nissan

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