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European Commission - Press release
€4.3m from European Globalisation Fund set to help 778 former car workers in Germany
Brussels, 20 July 2011 - The European Commission today approved an application from Germany for assistance from the EU Globalisation Adjustment Fund (EGF). The € 4.3 million requested by the German authorities will help 778 redundant workers back into employment. The workers lost their jobs in the car sector after the demand for new motor vehicles in the EU decreased with the onset of the economic slowdown. The application will now be put before the European Parliament and the Council of the European Union for a decision.
"The car industry has been severely affected by the financial and economic crisis. Today's decision will help the redundant workers on the path to a new job through training and support to help them gain new skills," said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. He added that the training provided through the EGF would help the workers: "to adapt their skills to the requirements of "green" innovation in the car and other industries thus making their transition to a new job easier."
The German application relates to 778 redundancies in five car parts suppliers. The dismissals were due to the financial and economic crisis which saw a substantial fall in demand for new motor vehicles. The EU followed the world-wide trend where demand for new cars dropped by 5.6 % in 2009 compared to 2008. Faced with this sudden fall in demand, car manufacturers reduced their production even more drastically. In 2009 car production in the EU decreased by 17 % compared to 2008 and by 23 % compared to 2007. This downward trend continued in 2010. In the first three quarters of 2010, car production in the EU was 14 % below that of the same period in 2008.
Suppliers have been under pressure for some time by car manufacturers to reduce their margins. The sudden and drastic fall in demand for cars in 2009 meant a significant reduction in production capacity, as well as in a significant drop in revenue for suppliers to the automotive industry. As a result, suppliers to the industry suffered the impact more seriously than the main manufacturers.
The package of EGF assistance for the 778 former workers in the car industry will help them back into employment by offering: Training courses leading to qualifications, international and national labour market guidance, in-depth guidance for business start-up, workshops and peer groups, placement search, counselling and support in a new job and during unemployment, activation supplement and job search allowance. The total estimated cost of the package is € 6.7 million, of which the European Union has been asked to provide EGF assistance of € 4.3 million.
The territory principally concerned by the redundancies in Germany is the Land North Rhine Westphalia, in particular the administrative districts of Arnsberg and Düsseldorf. Of the 778 redundancies covered by the application 554 occurred in the administrative district of Arnsberg and 224 in the administrative district of Düsseldorf. As a region that has largely export-oriented economic sectors like the car and metal industry, as well as the manufacturing of machinery, Arnsberg has been severely hit by the crisis. The employment rate in Arnsberg was already affected by dismissals by Nokia in Bochum, for which an EGF contribution was granted (application EGF/2009/002 DE/Nokia). The administrative district of Düsseldorf is characterised by an unemployment rate that is generally higher than the average for North Rhine Westphalia and Germany.
There have been 77 applications to the EGF since the start of its operations in January 2007, for a total amount of about €353 million, helping over 75,000 workers. EGF applications relate to the following sectors: automotive (France, Spain, Portugal, Poland, Austria, Germany, Sweden and Belgium); textiles (Italy, Malta, Lithuania, Portugal, Spain and Belgium); mobile phones (Finland and Germany); domestic appliances (Italy); computers and electronic products (Ireland, Portugal and the Netherlands); shipbuilding (Denmark); mechanical/electronic (Denmark, Poland and Germany); repair and maintenance of aircraft and spacecraft (Ireland); crystal glass (Ireland); ceramics and natural stone (Spain); construction (Netherlands, Italy, Ireland and Lithuania); carpentry and joinery (Spain); electrical equipment (Lithuania) publishing and printing industry (Netherlands), furniture (Lithuania), shoe manufacture (Portugal), retail trade (Czech Republic, Greece and Spain) and wholesale trade (Netherlands). Final reports from the earlier cases supported by the EGF show strong results in helping workers stay in the labour market and find new jobs.
The EGF, an initiative first proposed by President Barroso to provide help for people who lose their jobs due to the impact of globalisation, was established by the European Parliament and the Council at the end of 2006. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument. It forms part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and applies to all applications received from 1 May 2009 onwards.
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