Nissan has reportedly calculated the cost of shutting down its factories in Barcelona, Spain as being close to €1.5 billion ($1.7 billion).
Quoting a union source, Reuters reports that the cost of shutting down the Barcelona factories is currently in the middle of a debate in Spain, as the government claims that it’s cheaper for Nissan to keep their plants open and running.
The announcement of the facilities being closed came last week as part of Nissan’s turnaround plan, causing protests from workers while the Spanish government said that they’ll try to convince the Japanese automaker to keep the facilities open.
Read More: Nissan Cutting Global Production And Lineup By 20%, Closing Barcelona And Indonesia Plants
A report from the Barcelona-based La Vanguardia newspaper said that Nissan had told workers that the cost of shutting their three local plants could be as high as €1.5 billion. However, according to the union source, a Nissan executive said on the day the shutdown was announced that the cost would be much lower, at €700-€800 million ($781-$893 million).
Union sources say that the second estimate was “probably unrealistic”, as that would barely cover the redundancy payments to workers. In addition, Nissan will also have to cover costs related to suppliers and dismantling factories, with one of the sources saying: “1.5 billion euros is more realistic. It’s not easy to dismantle a factory.”
According to the Spanish newspaper, Nissan estimates that it would take close to seven years to recover in savings the price of shutting down its Barcelona facilities.
