How the recession closed the door on a Spanish boom

Walk through your average Spanish holiday villa and count the doors. There are probably at least 10. Now glance up and down the street at the new homes that have sprung up during Spain's decade-long building boom. Of the tens of millions of wooden doors found in homes across the country, almost all came from a single town in La Mancha, the windswept plain south of Madrid where there's barely a tree to be seen on the horizon.

Tiny Villacañas is far from the tourist trail, has no cultural history to speak of, and is not particularly beautiful. But it's become famous in recent years as Spain's leading producer of doors. Fierce competition among a handful of canny local carpenters produced a sprawl of factories, which sourced oak and tropical hardwoods from around the globe to produce old-style panelled doors with industrial methods, and at prices none could match.

During the boom years, lorries streamed from Villacañas's industrial park laden with nearly 80 per cent of Spain's doors, delivering some seven million a year to every corner of the nation. But now housebuilding has ground to a halt, Spain is in recession and Villacañas's door industry is shattered. The town is dying.

Felipe Manso is only 36 but he has been making doors for 20 years. Now he is outside the Visel factory on the edge of town, among 500 people recently laid off. He's waiting for a judge to declare the company insolvent before he can collect a certificate entitling him to dole money.

"I feel defrauded by the government, the employers and the trade unions," he says. "We workers are the most vulnerable and least protected in this crisis. We've been discarded like rubbish and we're furious."

Workers at Villacañas were a proud elite, a labour aristocracy enjoying high wages and permanent jobs. Men and women flocked from 100km away, even from Madrid, to work for companies whose order books bulged. Now those laid off smoke anxiously outside the factory gates, the fierce sun glinting off their dark glasses, facing the prospect of years without work.

Andres Fernandez, 34, moved from the bright lights of the capital to the small town east of Toledo nearly six years ago, bought a house here and supports a wife and young daughter. "I want to find work but there isn't any. I'm trying to sell my house and return to Madrid, but it's the worst possible moment. I'll try to get a bar job; anything really."

Villacañas's industrial zone, where workers once used to dodge constant traffic of trucks and lorries, is now empty and silent. Two of the town's eight factories have closed since the building boom burst last year, two more have suspended payments, and the rest have slashed production by a breathtaking 70 per cent.

"The problem is the town concentrated on one single activity," says Manuel Ballesteros, regional secretary for the Workers' Commissions trade union. "There's nothing here but doors. We warned for years that companies should diversify, seek markets abroad. It's a mono- industry, and it's collapsed."

Barely 12 per cent of Villacanas's workforce is unionised, he says. "They've never had to fight for wages or conditions." At the boom's peak, when Spain built 800,000 homes a year – more than Britain, Germany and France combined – door-makers worked double shifts to meet demand. Now unemployment in Villacañas, zero for nearly a generation, is rising fast. At 15 per cent, it matches the national average, which is the highest in Europe. A further problem is the lack of schooling. "I left school at 16 to work in the factory," Mr Manso says. "Why stay on when you could get a permanent contract at €1,200 a month (£1,000) – twice the national average – buy a motorbike and have a good time?" He's taking adult education classes to buff up qualifications for another job. "But I reckon my chances of getting work soon are nil."

The town centre's narrow streets are dotted with shops whose metal shutters are drawn, a travel agency, a shoe shop, a perfumery, an estate agent. Others have windows plastered with discounted offers, trying to net trade which has slowed to a trickle. Half-finished luxury homes lie abandoned, cement-mixers and cranes already gone.

The socialist Mayor, Santiago Garcia Aranda, says: "It was a mistake to put all our eggs in one basket. At the peak of the boom in 2006, 5,700 workers were employed making doors. Now, fewer than 3,000 remain, mostly half-time. Jobs are in freefall; we'll be lucky if 2,000 are still working by the year end. That's a 70 per cent drop."

Survival plans are vague: tourism, a proposed "logistics" (distribution) centre – still a churned-up wasteland on the road to Madrid. The door manufacturers' association, Afap, proposes cheaper lines, and more exports, a bold ambition since 95 per cent of output sells at home. Real hardship has yet to grip Villacañas, because most people are paid unemployment benefit for up to two years. "The worst moment will come next year when people stop getting the dole," the Mayor says. "I fear there will be poverty and hunger. That's our biggest worry."

At lunchtime, Bar Tere, near the town hall, is deserted except for a few men playing cards. "It used to be packed, every table occupied and customers two deep at the bar," says a former door-maker, Angel Torres, 45, staring into his beer. He and his wife lost their jobs last November, when the factory where he'd worked for two decades was closed because of an unpaid electricity bill.

"We saw it coming, but couldn't believe it when it happened. It was like an earthquake bringing down everything around you. I apply for everything, in Toledo, in Madrid, and on the internet, but 20 to 50 people chase every job. You keep looking, but you find there's nothing. I feel more demoralised every day."

His former benchmate Jesus Garcia Perez, 54, says: "My hopes of getting a permanent job at my age are in ruins. I'll take any short-term work, for a month or two as a painter or handyman, to break the routine of doing nothing."

Seven of the 124 workers laid off with Mr Torres pooled their compensation to set up small businesses with jobless relatives, he says. But Mr Torres doesn't see this as a solution. "It's too risky. Small businesses that did well are closing now because bigger firms they depend on aren't paying their bills. And if you fail, that's your money gone."

He adds: "People thought Villacañas was El Dorado, but it's finished." Back in the industrial park, a timbered tavern called El Dorado, decorated with the portrait of a buxom woman, promises fun and entertainment. But like many shops, warehouses and factories near by – and across Spain – it is barred shut.