Tijdschrift voor Economische en Sociale Geografie – 2006, Vol. 97, No. 4, pp. 377–388. © 2006 by the Royal Dutch Geographical Society KNAG Published by Blackwell Publishing Ltd., 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA Blackwell Publishing Ltd THE AUTOMOTIVE INDUSTRY IN THE ‘OLD PERIPHERY’ OF THE EUROPEAN UNION: REGIONAL INPUT LINKAGES OF VOLKSWAGEN NAVARRA SA RICARDO ALÁEZ-ALLER & AMAYA ERRO-GARCÉS Departamento de Economía, Universidad Pública de Navarra, Campus de Arrosadía, 31006 Pamplona, Spain Received: January 2005; revised June 2005 ABSTRACT The intended main output of this paper is a measurement of the dependence of the regional economy of Navarre (Northern Spain) on the Volkswagen plant producing the Polo model. Based on a field survey (qualitative interviews with 33 automotive suppliers) an exercise is developed to estimate the impact of the closure of the VW plant on regional employment. The degree of dependence on the Volkswagen plant found is lower than had been speculated: it is calculated that 7,222 direct and indirect jobs would be lost if the plant relocated. This study also casts doubt on the reliability of input-output tables in estimations such as the one proposed here. Finally, a comparison with other automotive assembly plants in Spain could be construed as evidence of convergence in the organisational models of the assembly plants on the ‘old periphery’ of Europe. Key words: Automotive industry, Navarre-Spain, qualitative interviews, regional economic dependence, productive organisation INTRODUCTION Globalisation has led to the world economic map being redrawn. Dicken (2003, p. 1) considers that ‘when we talk about globalization we must always remember that it is a set of tendencies [ . . . ] both geographically and organizationally uneven’. The result of this process depends on many factors (the decisions of transnational corporations, institutions, technology, etc.), and it leads to a continual reformulation of produc- tion maps. In this context the incorporation of Eastern European countries into the European Union (EU) has been seen as a factor that could redraw the economic map of Europe, entailing in particular the relocation in the East of assembly plants from what we might call the ‘old periphery’ of Europe. These forecasts are usually based on the logic of labour costs, which are considered to be a basic explanatory factor in assembly activities. The assembly plants potentially under threat may well account for a considerable proportion of the jobs in their regions. This paper reflects the concern for the impact that the shut-down of assembly plants could have on regional economies, and presents an exercise that seeks to estimate how many jobs would be lost in the first and second tier suppliers located in Navarre (Northern Spain) if the Volkswagen consortium decides to close down the plant producing its Polo model near the regional capital, Pamplona. The paper can thus be seen as a case study that could reflect the situation of a number of regions in the EU that have specialised in automotive assembly work. Methodological rigour in principle rules out the extrapolation of results from case studies, but the conclusions of this paper give clues to the extent