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Globalisation Fund to help 4,000 workers in mobile phone sector
Commission Européenne - IP/07/1412 27/09/2007
Brussels, 27 September 2007
The European Commission today announced that it has approved two further applications for assistance under the European Globalisation Adjustment Fund (EGF) – from Germany and Finland. These will now be put before the European Parliament and the Council for decision. They are the third and fourth applications for EGF support and concern redundancies in two companies in the mobile phone sector: BenQ in Germany and Perlos in Finland.
Employment, Social Affairs and Equal Opportunities Commissioner Vladimír Špidla said, "I am happy to put these applications forward because they will help over 4,000 redundant workers back into employment. The EGF is being used as it was designed to - to respond to the impact of structural change on dynamic global markets."
Both applications are made against a general trend towards delocalising production for mobile phones and accessories, mostly to Asia. This is not only because it is cheaper to make mobile phones there, but also because of the proximity of technology partners and a fast-growing consumer market.
The BenQ application concerns two German plants of the Taiwanese mobile phone manufacturer BenQ. In December 2006, BenQ withdrew financial support from the two subsidiary companies, resulting in about 3,300 workers being made redundant in three production sites in Munich, Kamp-Lintfort and Bocholt. The contribution requested from the EGF in the BenQ application is EUR 12.8 million.
The Perlos application relates to redundancies in two Finnish production plants of Perlos, a manufacturer of mobile phone accessories. In this case, some 1,000 redundancies were caused by the decision to discontinue production activities in Finland and to close down two Perlos factories located in Joensuu and Kontiolahti, in the Northern Karelia region, by September 2007. The contribution requested from the EGF in the Perlos application is EUR 2 million.
The EGF may give a financial contribution in cases where more than 1,000 workers in an enterprise or a regional sector are made redundant due to major structural changes in world trade patterns leading to substantially increased imports into the EU or a rapid decline in EU market shares.
The EGF was established by the European Parliament and the Council at the end of 2006 to provide help for people who have lost their jobs due to the impact of globalisation. Commission President José Manuel Barroso proposed the idea in 2005 to create an instrument of solidarity to help workers affected by redundancies resulting from changes in world trade patterns find their way back into work.
The first two EGF applications concern the French car sector and relate to
suppliers of Peugeot-Citroën and Renault, respectively. The Commission is
also currently examining applications for EGF assistance from the Italian and
Maltese governments. In total, there are now eight formal applications for
assistance from the EGF.