The European Commission has proposed to provide Belgium with €570,945 from the European Globalisation Adjustment Fund (EGF) to help 479 workers made redundant by Ford in Genk (Belgium) and its suppliers to find new jobs. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "Car production in Europe has dropped considerably in the years of the Eurozone crisis, mainly due to falling demand. At the same time, structural change in the car industry responding to globalisation is on-going. Many workers in the motor industry are experiencing hardship and EU solidarity in helping them to manage these difficult transitions is therefore important. The € 570,945 we have proposed would help these redundant car workers to adapt their skills and facilitate their transition to a new job."
Belgium applied for support from the EGF following the redundancies of 512 workers of Ford-Werke GmbH (Ford Genk) and ten of its suppliers. These redundancies were the result of a rapid decline of the EU’s market share in the production of passenger cars at worldwide level.
The measures co-financed by the EGF would help the 479 workers facing the greatest difficulties in finding new jobs by providing them with job-search assistance, active job-oriented guidance and a variety of retraining and vocational training.
The total estimated cost of the package is €1.14 million, of which the EGF would provide half.
The application is based on the fact that the EU share in the global market for passenger vehicles has been shrinking in recent years, within the general upward trend of the sector.
According to data referred to by the Belgian authorities, between 2007 and 2012, the production of passenger cars in the EU-27 decreased from 17.10 million units to 14.61 million units (− 14.6 %; − 3.1 % annual growth), whereas, during the same period, at worldwide level, the production of passenger cars increased from 53.05 million units to 63.07 million units (+ 18.9 %; + 3.5 % annual growth). This has led to a decrease of the EU-27’s market share in the production of passenger cars at worldwide level, measured in volume terms, from 32.2 % to 23.2 % (− 28.2 %; − 6.4 % annual growth). By comparison, during the same period, China’s market share increased from 12.0 % to 24.6 % (+ 104.6 %; + 15.4 % annual growth), whereas the market shares of the other main producers decreased (Japan: − 27.7 % / − 6.3 % annual growth; South Korea: − 5.9 % / − 1.2 % annual growth; USA: − 12.0 % / − 2.5 % annual growth) but, generally, to a lesser extent than for the EU-27.
The redundancies at Ford Genk and its suppliers primarily affect the province of Limburg, in the Flemish Region, in northeast Belgium. The province of Limburg is a former coal-mining area in which employment is strongly dependant on traditional industry.
Ford Genk has been the largest employer in the province of Limburg, representing 1.7 % of the total number of persons employed. It also accounted for 10 % of the total turnover of the 500 largest enterprises in Limburg.
In comparison to the Flemish average, the province of Limburg is characterised by a high level of unemployment, by lower qualification levels and skills levels, and by a less developed supply of education services. In addition, enterprises in the province of Limburg appear to be generally less innovative and to have a lower degree of internationalisation compared to the Flemish average (in terms of share of exports and level of inward foreign investments) and the number of start-up enterprises is also relatively low.
The province of Limburg had previously received EGF support for another mass redundancy case (IP/09/1293).
More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost some jobs, particularly in vulnerable sectors and affecting lower-skilled workers. This is why Commission President Barroso first proposed setting up a fund to help those adjusting to the consequences of globalisation. Since the start of its operations in 2007, the EGF has received 128 applications. Some €523 million has been requested to help more than 111,000 workers. EGF applications are being presented to help workers in a growing number of sectors, and by an increasing number of Member States. In 2013 alone, it provided more than €53.5 million in support.
In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument forming part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and the crisis criterion applied to all applications received from 1 May 2009 to 30 December 2011.
Building on this experience and the value added by the EGF for the assisted workers and affected regions, the Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope has been expanded to include again workers made redundant because of the economic crisis, as well as fixed-term workers, the self-employed, and, by way of derogation until the end of 2017, young people not in employment, education or training in regions of high youth unemployment.