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Madrid says Volkswagen has 'guaranteed' its investment in Spain

An employee of Seat works at the company's factory in Martorell, near Barcelona, on December 5, 2014, during a visit by Spain's King on the occasion of the 30th anniversary of the Ibiza model

The Spanish government said Friday that German carmaker Volkswagen has guaranteed it will follow through with an investment of 4.2 billion euros ($4.7 billion) at its two plants in Spain despite the scandal over its pollution-cheating scam.

Industry Minister Jose Manuel Soria told COPE radio that he met with newly appointed Volkswagen chairman Hans Dieter Poetsch in Germany on Thursday and he "guaranteed that they will maintain the investments they had planned in Spain."

"Of course they have to take these types of decisions still to some internal committees, but there is the guarantee that this programme will be maintained," Soria added.

VW's new chief executive Matthias Mueller said Tuesday the company will review all planned investments given the costly recall of millions of vehicles it now faces, plus fines and lawsuits.

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"What is not absolutely necessary right now will be scrapped or postponed," Mueller told staff, adding that "every euro that stays in the company helps us".

Volkswagen earlier this year announced plans to invest 3.2 billion euros at its SEAT plant in Martorell outside Barcelona between 2015 and 2019 and roughly one billion euros at its plant in Navarra in northern Spain.

A spokesman for SEAT declined to comment on Friday's announcement.

The head of the company's works council said that "the minister's words have not been confirmed by SEAT or the Volkswagen Group".

Volkswagen sparked global outrage last month when it admitted that 11 million of its diesel cars worldwide were equipped with so-called defeat devices that activate pollution controls during emission tests but turn them off when the car is on the road.

Volkswagen has already said it will set aside 6.5 billion euros in provisions in the third quarter but Mueller acknowledged that was just the start as it covers just the estimated cost of fixing the vehicles.

SEAT is a pillar of industry in Spain, contributing roughly 1.0 percent to the country's gross domestic product, according to Volkswagen.

It employs about 22,000 people in a country with a jobless rate of just over 22 percent.