industry


industry
   Spain became a fully industrialized nation much later than most other western European nations. Although Catalonia and the Basque country could be considered industrialized regions by the end of the nineteenth century, the rest of Spain was predominantly agricultural until the rapid industrial expansion of the 1960s. Even today large areas of western Spain have little industry; indeed 60 percent of Spanish industry is located in just five provinces: Barcelona, Vizcaya, Madrid, Valencia and Alicante. The rapid industrial development of the 1960s was followed by an equally rapid de-industrialization in the late 1970s and early 1980s as energy-intensive industries found they could not absorb the vastly increased energy costs brought about by the OPEC increase in the price of oil. Spanish industry, at one time dominated by the public sector, is now dominated by foreign-owned companies, which generate more than half of manufacturing output. Although the public sector still retains a presence, privatization is proceeding apace as the state divests itself of profitable enterprises to raise revenue or of unprofitable ones to reduce losses. Some industries, however, such as coal and shipbuilding, are such heavy losers that there is little prospect of the private sector taking them over. Among the big public corporations to be successfully privatized have been the telecommunications company Telefónica, the oil company Repsol, and the electricty company Endesa, with the Spanish commercial banks having been encouraged to become major shareholders in order to keep control at home. Among the best known foreign companies with an important stake in Spanish industrial enterprise, either directly or through shareholdings, are Elf-Aquitaine, BP, Shell, Total, IBM, Hewlett-Packard, Rank Xerox, Olivetti, Digital, Fujitsu, GECAlsthom, Bosch, Siemens, Dow Chemical, Henkel, Hoechst, Procter & Gamble, Bayer, Ciba-Geigy, Unilever, Nestlé, Allied Lyons, Danone, Guinness, as well as the vehicle manufacturers Volkswagen, Renault, General Motors, Ford, Citroën, Nissan, Peugeot, Mercedes Benz and Fiat-Iveco, the motorcycle manufacturers Honda and Yamaha, and tyre manufacturers such as Michelin and Firestone. There are some 10,000 companies operating in Spain which have 50 percent or more of their share capital in foreign hands.
   Large loss-making industrial companies that remain in the public sector include Hunosa (mining), Astilleros Españoles and Bazán (shipbuilding), Santa Bárbara (defence equipment), Ensidesa and Altos Hornos (steel). There is little the government can do except try to stem the losses by a gradual process of cutbacks, outright closure being a political impossibility as long as the current high unemployment persists. Previous attempts at redundancies provoked such violent protests that the proposed figures had to be scaled down. Industrial output (excluding construction) accounts for about 22 percent of Spain's GDP, down from about 27 percent in the late 1980s. Looking at broadly defined industrial sectors, the largest by output value is the metallic industries sector (which includes all machinery and vehicle manufacture) with 28–9 percent of the total value of industrial production. In second place comes the food processing industry (including drinks and tobacco), which contributes about 20 percent. In third and fourth places come non-energy minerals and chemical industries with 17–18 percent, and the water and primary energy sector (which includes petroleum refining and electricity production and distribution) with about 14.5 percent of total industrial output. These are the four major industrial sectors, after which come the paper production and publishing sector (6 percent), the rubber and plastics sector (3.5 percent), the wood, cork and furniture sector, the footwear and clothing sector, the textile (i.e. cloth) and leather sector (each of which contribute approximately 3 percent), and finally other manufactures (e.g. jewellery, toys and sports equipment) with less than 1 percent. If we compare value of production with value added, the figures change little except for two sectors: with 19 percent of the total value added the water and primary energy sector shows itself to be highly efficient (relative to the prices it can command in the market place), whereas the food processing sector, with just 15 percent of the total value added, shows itself to be relatively inefficient. It must be pointed out that the high efficiency of the energy sector is due entirely to the electricity sub-sector, where the difference between production costs and the prices obtained at the point of sale is huge. No other industrial sector (except water supply) enjoys such a monopolistic advantage. This explains the popularity of electricity supply companies with Spanish shareholders. Finally, with an employed population of between 2.0 and 2.2 million out of a total employed population of some 12.4 million, Spanish industry as a whole is relatively more efficient in its use of labour than either agriculture, construction or services. This, however, has been achieved at the cost of shedding some threequarters of a million jobs between 1990 and 1993.
   Further reading
   - Chislett, W. (1996) Spain 1996. The Central Hispano Handbook, Madrid: Banco Central Hispano (chapter 4 offers a clear, succinct account of recent developments).
   - Salmon, K. (1995) The Modern Spanish Economy. Transformation and Integration into Europe, London: Pinter (chapter 6 offers an informative survey of Spanish industry by sector).
   C. A. LONGHURST

Encyclopedia of contemporary Spanish culture. 2013.

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