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Tata Hispano ceases production at its Zaragoza plant Press kit

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24 September, 2013

  • The company accumulated losses of 60 million euros in the last five years
  • The situation is untenable in Zaragoza factory because of the dramatic drop in its production and sales.
  • To impact entire workforce of 287 employees; the company discussing a social plan with the Workers’ Committee, The Company committed to working together in search for solutions to minimize the possible effects of the measure.

Tata Hispano Motors Carrocera in Zaragoza today announced to the Workers’ Committee of Tata Hispano Motors Carrocera that it planned to cease production activities in Zaragoza’s factory. The Company has invited the workers’ representatives to the discussions to formally initiate the consultation period in order to agree on a social plan for the 287 employees working in the factory today.

The decision to cease the activity at Tata Hispano Motors Carrocera has been compelled due to economic and business factors, as despite strong investments, there has not been a positive result to reverse the challenging business situation and losses for the plant.

In the past five years, Tata Hispano Motors Carrocera operating losses accumulated to over 60 million euros, and there has been a constant decline in its production. These have been a result of consistently falling sales in recent years, primarily due to the worst-ever decline in the bus market, showing a decline of -38% in the number of registrations. Further, all market evaluations do not predict any positive change in the near future, with the growing accumulation of operating losses making the plant production unviable.

Tata Hispano Motors Carrocera has informed the Workers Committee about the company’s decision to definitely cease the production of the factory. The production activity is expected to stop in October 2013 after fulfilling the commitments to deliver current orders.

The company has expressed its willingness to reach an agreement. The Company continues to have a tremendous respect for the workers of Tata Hispano Motors Carrocera, and remains committed to an ongoing dialogue that may help achieve a more satisfactory agreement for both parties, with the best possible accompanying social plan to help minimize the effects of the measure.

Tata Hispano Motors Carrocera wants to thank all the employees of the factory in Zaragoza for the effort and work they have put in over the years, and hopes to reach an agreement satisfactory to all.

The Company also announced that it had received an offer from the Benseny Group. This proposal, which is not a purchase offer, is being pursued to explore the possibility of achieving continuity of Zaragoza factory.

About Tata Hispano Motors Carrocera

Tata Hispano Motors Carrocera, SA is a Spanish company based in Zaragoza founded in 1939, dedicated to the design development, production and marketing of chassis for buses and coaches of urban, suburban, and middle and long distance on different chassis of international brands.

In 2005, Tata Motors Limited invested 21% stake in the company to become a minority stake holder subsequently, in November 2009, Hispano Carrocera SA was renamed Tata Hispano Motors Carrocera SA as a result of the 100% acquisition of the shares by Tata Motors in an attempt remedy the company’s losses.

However, despite these investments by Tata Motors since 2005, the impact of the 2008 global economic crisis and the resultant shrinking demand has caused huge losses accumulated to more than 60 million euros over the past five years. The company closed 2012 with a loss of more than 14 million euro. In this product segment, market has been shrinking year after year, leaving huge idle capacity with most of the Carroceras.

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