Brussels, 16 October 2013
Employment: Commission proposes €9.8 million from Globalisation Fund for former Nokia workers in Finland
The European Commission has today proposed to provide Finland with €9.8m from the European Globalisation Adjustment Fund (EGF) to help 3,719 workers made redundant by Nokia plc and 31 of its subsidiaries, suppliers and downstream producers, back into employment. The proposal now goes to the European Parliament and the EU's Council of Ministers for their approval.
László Andor, European Commissioner for Employment, Social Affairs and Inclusion commented: "World production patterns of mobile phones are changing, as European manufacturers move their facilities closer to the fastest growing markets, now located in Asia". He added: "Today's decision will help to prepare the former Nokia workers for new job opportunities. Helping these workers to manage their difficult transitions is important and the Globalisation Fund is an instrument that has proved its worth over the years."
Finland applied for support from the EGF for 4,509 dismissed workers: 2,544 workers made redundant by Nokia plc and 1,965 people made redundant by its subsidiary Nokia Siemens Networks and 30 other suppliers and subcontractors. Of the total redundant workers, 3,719 are expected to participate in the EGF co-funded measures. The package will help the workers by offering them job-search counselling, career guidance, vocational and competence mapping, work-capacity evaluations, training and retraining, guidance towards entrepreneurship and services for new entrepreneurs, support for starting independent business operations, pay subsidies and mobility assistance.
The total estimated cost of the package is approximately €19.6 million, of which the EGF would provide half.
The primary reason for the redundancies is the transfer of functions within the sector to non-EU countries. Assembly of mobile phones, previously carried out in Salo (Finland) and Cluj (Romania), has been offshored to Asia (China, South Korea, India and Vietnam, where a new Nokia plant is about to be inaugurated). Component manufacture and subcontracted production had already been transferred out of Europe. Following the direction taken by production, both design and product development have been, or are being, offshored.
This is the follow-up application in support of the remaining Nokia Salo workers, Nokia workers in other parts of the country (mainly Espoo, Tampere and Oulu) and the resulting redundancies in Nokia Siemens Networks and 30 other subcontractors in various regions of Finland.
The company's intention was to keep the Nokia Salo plant operational while reducing the company's personnel by some 12 % in offices all around the world. This led to the closure of the plant in Cluj, Romania in September 2011, for which another EGF application was presented (see IP/2012/1123). Nokia Siemens Networks also announced major redundancies in November 2011. On 22 March 2012, redundancies in Nokia Salo were announced, numbering 1,000 workers out of a total of 1,700. Finland submitted an application in support of these workers (see IP/2012/1122), adding that further redundancies were already planned, and a follow-up application from Finland for the next wave of redundancies from Nokia itself and its subcontractors would be prepared.
There are several regions of Finland affected by the redundancies, three of which are in the southern part of the country (Southwest Finland, Usimaa and Pirkanmaa) and a fourth in the north (North Ostrobothnia). The region of Southwest Finland is the most severely affected, with 1,050 new redundancies from Nokia and another 360 from the subcontractors. This is the region where Salo is located, which has already suffered from the earlier waves of redundancies from Nokia.
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 110 applications. Some €471.2 million has been requested to help more than 100,000 workers. EGF applications are being presented to help in a growing number of sectors, and by an increasing number of Member States.
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 Commission has proposed to maintain the Fund also during the 2014-2020 multiannual financial framework, while further improving its functioning. Provisional agreement between the co-legislators on the new regulation has recently been reached.
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