Possible Stellantis plans: Why Morocco is attractive for Opel

According to media reports, the Opel parent company Stellantis wants to relocate jobs from Rüsselsheim to Morocco. That could save a lot in personnel costs. But Morocco is attractive for other reasons too.

Cars for the world market, assembled in Morocco: In the future, this branch of the country’s economy is to be expanded further. This is what the Moroccan government wants, but European companies apparently also want it: According to media reports, Opel parent company Stellantis wants to relocate jobs from Rüsselsheim in Hesse to Morocco. One reason is apparently the wage costs in Germany. In North African Morocco, only a fraction of the wage has to be paid, and the kingdom is hungry for job creation in the face of high unemployment. Morocco has developed into the leading car manufacturer in Africa in recent years.

German economy strives for Morocco

Therefore, the Opel plans did not surprise experts in Morocco, explains Managing Director Matthias Wenzel of the German Chamber of Commerce and Industry in Morocco: “Morocco is currently the second most important investment location for German companies on the African continent – after South Africa.” Morocco has now overtaken South Africa as the largest automobile manufacturer in Africa. “Of course, this also arouses interest in German companies,” says Wenzel.

German companies employ more than 35,000 people in the country. According to Wenzel, 150 companies are currently present in Morocco – they would have built up an investment volume of 1.2 billion euros here. Wenzel describes Germany as a latecomer when it comes to investing in Morocco. Since 2010, however, the German investment volume has increased by 600 percent – in the automotive, electrical and chemical sectors.

Good connections on many levels

Many factors made Morocco attractive as a manufacturing location: “On the one hand, of course, it is the physical proximity. The Moroccan mainland is only separated from mainland Europe by the Strait of Gibraltar 14 kilometers.” This spatial proximity is now combined with an excellent infrastructure and logistics, according to Wenzel. “We have very well-established industrial parks here, where there are also appropriate subsidies and incentives for investment.”

Wenzel means, among other things, the mega-port Tanger Med on the north coast of Morocco. This is now the largest container port on the African continent and the Mediterranean – with excellent connections to Europe. In addition, the Moroccan private sector has increasingly adjusted to using English as a business language, which makes cooperation with German partners easier.

Morocco is vying for branches

In the past 20 years, Morocco has tried hard to become an attractive location for international investment, says economic expert Atmane Dkhissi. Between 2014 and 2019 alone, more than 147,000 jobs were created. “In fact, there are now a number of tax incentives that benefit all companies that are export / import-oriented,” said Dkhissi.

For investments of more than 200 million dirhams, the local currency, there are VAT exemptions on the import of capital goods, equipment and tools. “These are not automotive-specific measures, but of course companies in the automotive industry will benefit from them,” the expert is convinced.

Precarious working conditions The other side of the coin

The Moroccan trade unionist Mohamed Hakech says that low wage costs often make it attractive for foreign companies to settle in the North African kingdom. But the outsourcing of production facilities from Europe not only caused cheers in the country: They went on strike Employees at the Stellantis Auto Plant in Kenitra earlier this year – they denounced exploitative wages, unpaid benefits and poor or unsanitary working conditions.

“The standard is far from what the International Labor Organization defines,” complains unionist Hakech and therefore warns against seeing these job relocations from European companies to Morocco only as a gift: “They are looking for a place where labor law is weak or not is respected and where wages are very low in order to increase their profit. For them it is a ‘profit before life’ motto. “

But these jobs are still important for many people in Morocco – unemployment is high, especially among young Moroccans. The corona pandemic has exacerbated the work situation in the past two years.