Even after SEAT's well-publicized financial troubles in the 1980s, Volkswagen announced it would not give up the Pamplona factory. Today, the plant employs 5,000, turning out a remarkable 1,500 passenger cars a day.

VW produced its two millionth car in the fall of 1995. As the freshly minted Polo rolled off the line, it marked the first time in its history Volkswagen had launched a new model outside Germany.

The multinationals arrive for a combination of reasons. Some see Navarre as a low-risk staging ground for European expansion. Others have their eye on the fiscal incentives and the tailor-made programs that specifically address the needs of a company for water, training, sites and other requirements. Still others find attractive options in the acquisition of a Spanish company that has a good reputation in its market.

In recent times Navarre has become increasingly popular as a site for greenfield investments. While most recent investment activity in Spain is via acquisitions, Navarre is seeing about half of the flow in new greenfield facilities and half in acquisitions.

During the years of the Franco regime, most of Navarre's companies were local in nature. While they had a lock on the local market, they lacked the technology to compete globally. Then, as Franco began to relax restrictions on foreign investment, many Spanish companies were acquired by foreign multinationals, which expanded the activities of the locals and updated their technologies.

TRW is typical of that trend. The American-based multinational entered Navarre via a licensing agreement with a Navarran firm in the early 1960s, later becoming part owner. Finally, after determining that the company could advance TRW's European expansion strategy, TRW took full ownership in the 1990s.

Europe experienced some significant economic slides in the last 15 years -- first the era of industrial rationalization of the 1980s and then an economic crisis of 1993-95. Throughout the hard times, Navarre experienced only small blips in joblessness. Part of this was due to the incredibly diverse composition of Navarre's industrial community, part the result of export-led industrial activity and part the impact of the investments by multinationals.

Unemployment, currently under 10 percent, is the lowest in Spain. Navarre's jobless rate is half of Spain's average, lower than the average of the European Union and 25 percent lower than the most highly industrialized economies, such as Germany.