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European Commission

Press release

Brussels, 19 October 2012

Employment: Commission proposes €5.4 million from Globalisation Fund for former Saab workers in Sweden

The European Commission has today proposed to provide Sweden with €5.4m from the European Globalisation Adjustment Fund (EGF) to help 1350 workers made redundant by Saab and 16 of its suppliers. The proposal now goes to the European Parliament and the EU's Council of Ministers for their approval.

European Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "Car production in Europe has dropped dramatically and structural change in the car industry responding to globalisation is on-going. Redundancies like these are major shocks to regional economies and many workers in the motor industry are experiencing hardship. EU solidarity in helping to manage these difficult transitions is therefore important. This proposal for 5.4 million euros from Europe's Globalisation Fund would contribute to the workers' smoother transition to new jobs".

The Swedish application relates to 3748 redundancies which occurred in Saab Automobile AB and its subsidiary Saab Automobile Powertrain AB and 16 subcontractors. Of the total redundant workers, 1350 are expected to participate in the EGF co-funded measures. Sweden proposes EGF measures and actions which go beyond what the Public Employment Service would normally offer, so that it works with an "extended toolkit" to find tailor-made solutions. The EGF measures foreseen include: job-search support, vocational guidance, validation of experience and labour market training, work placement and job-search support, support for business start-ups and mobility allowances, all for a longer duration or at greater intensity than would normally be possible.

A particular focus of all the measures proposed is the move towards 'green' jobs, where Sweden is one of the leading players at international level. Forecasts predict future labour shortages in this area, which the EGF measures could help to avert.

The total estimated cost of the EGF package is approximately €11 million, of which the EGF would provide half, i.e. €5.4 million.

Background

In 2012 the 27 Member States had only 26% of worldwide passenger car production (15.1 million units), a major reduction from 34.1% in 2005 and 35.9% in 2000. During the same decade, the market share of the BRIC countries (Brazil, Russia, India and China) rose from 8.4 % (2000) to 15.8 % (2005) and 33.5 % (2010). The main driving force of this redistribution of world market shares is the geographical shift in consumption, in particular the rapid growth of demand in Asian markets which EU producers are less able to benefit from, being traditionally less well positioned on these markets.

Saab's situation had been uncertain over the past few years, with General Motors announcing in August 2008 that it wished to sell the company. Following several rounds of negotiations, the Dutch company Spyker Cars eventually bought Saab on 23 February 2010. It soon ran into liquidity problems that halted production. An attempt to sell the business to a Chinese company failed. On 19 December 2011, Saab Automobile filed for bankruptcy.

The vast majority of the redundant workers reside in the municipalities of Trollhättan, Vänersborg and Uddevalla, which are located between 70 and 90 km north of Gothenburg, the principal city of the industrialised county of Västra Götaland. After Saab's bankruptcy, unemployment in Trollhättan in January 2012 rose to over 20 %, the highest unemployment figure among the 290 municipalities in the country. Neighbouring municipalities also experienced a sharp rise in unemployment for the same reason, even though many of these already had very high unemployment levels due to previous factory closures.

There have been 101 applications to the EGF since the start of its operations in 2007. Some €443.3 million has been requested to help about 92,000 workers. EGF applications are being presented to help redundant workers in a growing number of sectors, and by an increasing number of Member States.

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. The EGF was established at the end of 2006 and was designed to demonstrate solidarity from the many who benefit from openness to the few who face the sudden shock of losing their jobs. 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 applied to all applications received from 1 May 2009 to 30 December 2011.

Building on the experience acquired with the EGF since 2007 and its value added for the assisted workers and affected regions, the Commission has proposed to maintain the Fund also during the 2014-2020 multiannual financial framework, while further improving its functioning.

Further information

László Andor's website: http://ec.europa.eu/commission_2010-2014/andor/

EGF website

Video News Releases:
Europe acts to fight the crisis: the European Globalisation Fund revitalised

Facing up to a globalised world – The European Globalisation Fund

Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion: http://ec.europa.eu/social/e-newsletter

Follow László Andor on Twitter: http://twitter.com/LaszloAndorEU

Contacts :

Jonathan Todd (+32 2 299 41 07)

Nadège Defrère (+32 2 296 45 44)


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