Brussels, 28 June 2013
Employment: Commission proposes €2.6 million from Globalisation Fund for former workers of the Italian car manufacturer De Tomaso
The European Commission today proposed to provide Italy with €2.6 million from the European Globalisation Adjustment Fund (EGF) to help 1,010 workers made redundant by De Tomaso Automobili S.p.A with their re-integration into the labour market. The proposal now goes to the European Parliament and the EU's Council of Ministers for their approval.
EU Commissioner responsible 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. Many workers in the motor industry are experiencing hardship and EU solidarity in helping them to manage these difficult transitions is thus important. The 2.6 million euros we have proposed would help these redundant car workers to adapt their skills and facilitate their transition to a new job or help them set up their own enterprises."
Italy applied for support from the EGF for 1,010 former workers of De Tomaso Automobili S.p.A, an Italian manufacturer of high-end luxury cars. The package is designed to help the workers by offering them career advice, outplacement and job-search assistance, vocational training and skills upgrades, entrepreneurship promotion and contribution to business start-up, hiring benefits, job-search allowances and contributions towards special expenses such as contributions for carers of dependent persons and contributions to commuting expenses. The total estimated cost of the package is approximately €5.2 million, of which the EGF would provide €2.6 million.
In 2012, the 27 EU Member States accounted for 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.
The high-end luxury auto market is also facing the downturn that is hitting mass-market car manufacturers. The weak growth combined with the general difficulties encountered by the automotive sector, together with the tightening of credit that followed the economic and financial crisis, put an extra burden on the enterprise, which could not work out a profitable solution. In April 2012, De Tomaso Automobili S.p.A. filed for bankruptcy.
The territories concerned by these redundancies are the regions of Piedmont (in particular Turin) and Tuscany, where the production plants of De Tomaso Automobili S.p.A were based. The economic activity in Turin, which is mostly linked to car manufacturing (Group Fiat is also based there), has over the past few years been affected by the consequences of the economic and financial crisis on the automotive industry. In 2009 the regional GDP of Piedmont decreased by 3,9 %. The GDP of the Tuscany region also declined (-2 %), but less than that of Piedmont, mainly due to the good performance of the service sector which characterizes the Tuscan economy.
There have been 108 applications to the EGF since the start of its operations in 2007. Some €467 million has been requested to help about 98,000 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 open markets with 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.
On 20 June 2013, the EU's Council of Employment and Social Policy Ministers agreed a general approach to continue the EGF in the 2014-20 period and to reinstate the 'crisis clause', under which the EGF can also be used to help workers who lost their jobs as a consequence of the global financial and economic crisis. This will now allow to start discussions with the European Parliament in view of a possible first reading agreement on the legal proposal.
László Andor's website: http://ec.europa.eu/commission_2010-2014/andor/
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