MADRID, Spain -- Valeo SA will shift more production from Europe to low-cost African countries with the planned shutdown of a plant in Spain.
The French supplier announced that it has entered discussions with local trade unions over the proposed closure of its wiring harness-systems plant in Orense, in the Galicia region of northwest Spain.
Production will be moved to a plant in neighboring Porrino, Spain, and to plants in Morocco and Tunisia in northern Africa.
Valeo closed a Spanish clutch-cable plant last year, centralizing production in Morocco and Tunisia.
Jose Antonio Bueno, a partner with Roland Berger Strategy Consultants of Madrid, says northern Africa is a "serious threat" to win labor-intensive jobs from Spain.
But Bueno says Spain's biggest challenge comes from the 10 countries that joined the European Union in May. "They offer exactly the same thing that Spain offered in the past: a previously closed market ready for liberalization with labor costs significantly lower than in other EU countries," he says.
Spain has lost more than 4,000 supplier jobs to lower-cost countries since 2002.
Other suppliers that have closed plants in Spain include Lear Corp. and Yazaki Corp.