“Relocation Has Increased Unfair Competition In Industry”

moreuBoard member at Iberdrola and Tubacex, Manuel Moreu Munaiz

Board member at Iberdrola and Tubacex, Manuel Moreu Munaiz believes relocation has increased unfair competitition in industry in Spain.

Q: There hasn’t been much interest in industry in Spain.

A: That’s true. After 25 years of relocation in industry, when there have been problems with intellectual property, this has created unfair competition in an asymetric market, no matter how much talk their is of competition in the free market. Recently we have seen help given to shipyards and shipping companies in the Far East, without anyone making any comment. Of course now all of it is in the eye of the storm, as a result of the elections in the US, with unimaginable consequences, where people could pay for the sins of others. I would say that on this particular point, we engineers are very concerned. The Institute of Engineering in Spain has for years been endorsing the signing of a state pact with industry, with the collaboration of the political parties, unions, the civil society and business organisations. And we hope this will soon be a reality.

Q: What sectors would this affect?

A: Such a massive effort is needed, in order to rise to 20% of industrial GDP from 13% and generate over 1 million jobs that it’s “all hands on deck.” One positive point is that we have very good infrastructures with which to gain competitiveness and we are located in a strategic enclave for offering logistic services, both in transit and our own, although with routes which need substantial improvements. Sectors like agrifood are already reacting, with the additional advantages of bringing jobs to rural locations, reducing the depopulation affect…Our tourism and our gastronomic riches need to be a shop window for this sector.

Q: And what about the automotive sector?

A: The automotive sector, both in terms of components as well as vehicles, is doing really well. Although there are always new threats. Top quality vehicle design services need to be brought into Spain, where undoubtedly we’ll be competitive. The same is true for the railway sector. The potential for exports and job creation is huge. The maritime sector also offers great potential in terms of construction and operation. We are very deficient in these services and are strategically placed to provide them. Strengthening scheduled services is strengthening trade. As far as construction materials go, we have allowed a very strong industry decline. This could have been maintained by having channels for export available. We’re talking state-of-the-art in as far as ceramic or stone coatings go. And this could and should reemerge in a lot of other areas.

Q: How important is it that labour costs in Spain are so competitive?

A: Well I believe that now, labour costs are less important. And hopefully this factor will become the least important. Productivity, along with flexibility and training, are what counts. The first two have clearly improved with this crisis. But the most important, training, is not progressing as it should and many of us think we are going backwards. Furthermore, everyone steers clear of any discussion: the central government, the autonomous regions, the political parties, the press, society, etc.

Q: Is Spain a leader in infrastructure?

A: The truth is that with 10 Spanish companies amongst the 100 most important in the world, you have the answer. But if we add to this the absence of a local market, the answer is obvious, given that all the companies are overseas, with percentages of foreign contracts reaching close to 100%. Our companies compete in infrastructure projects across the globe, on many occasions against each other. We should add that the infrastructure is very varied: energy, transport, logistic, water, communications, tourism, urban, industrial…

Q: What have they learned in Spain which they have later put into practice abroad?

A: It’s evident that the huge infrastructure development in Spain in the years prior to the crisis has favoured this international expansion. This is a real advantage because in international tenders you are required to show you have carried out similar projects. So the developments in Spain have allowed us to compete in bids overseas. But when you have companies with the capacity to develop innovative solutions, you need to change the tender model, thus allowing for gaining the future experience required in the international bids. This is already included in the models of innovative bids in many European countries, but not in Spain.

Q: Do you think the  engineering sector’s situation is improving in Spain?

A: The situation in Spain is still at rock bottom and under these conditions the level of domestic occupancy is ridiculous. Engineering services are contracted solely on price and this is the highest it could be. Excellent engineering services lower the final product of capex and opex. But engineering services without resources will never be able to complete the necessary improvements, causing differences in the quality of the work and cost overruns.




About the Author

Fernando Barciela
Fernando Barciela has been a regular collaborator for Spain's leading daily El Pais' business section since 1994. He is also a regular collaborator on foreign policy. For Grupo Consejeros he interviews the top executives of Spain's listed companies. He was a correspondent with Diario de Noticias, Portugal's leading daily newspaper, in 1987-2004. He has a degree in Business Science and Journalism from the Complutense University.