Brussels, 28 October 2014
Employment: Commission proposes €1.8 million from Globalisation Fund for former workers of Whirlpool in Italy
The European Commission has today proposed to provide Italy with €1.8 million from the European Globalisation Adjustment Fund (EGF) to help 608 former workers of Whirlpool Europe S.r.l. to find new jobs. The redundancies occurred in the Autonomous Province of Trento. The proposal now goes to the European Parliament and the EU's Council of Ministers for their approval.
EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "The crisis has hit household demand for domestic appliances. As a result EU production of domestic appliances has been falling since 2008. This proposal to allocate €1.8 million from the European Globalisation Fund would help to prepare over six hundred redundant Whirlpool workers in Trento for new job opportunities in other sectors with a more promising outlook."
Italy applied for support from the EGF for 608 workers made redundant following the closing down of Whirlpool's plant in Spini di Gardolo (Trento) specialised in the production of fridges.
All the redundant workers are expected to benefit from the measures. The package will offer the workers counselling and guidance, coaching, skills assessment, general training, re-training and vocational training and guidance towards business creation. These measures will be complemented by hiring benefits, a contribution to commuting expenses and a job-search allowance.
The total estimated cost of the package is approximately €3.1 million, of which the EGF would provide €1.8 million.
As a consequence of the global financial and economic crisis, there was a significant downturn in the EU economy. Over the period 2009-2013, the real GDP growth rate (percentage change on the previous year) was negative in three out of the five years considered.
During the same period household consumption in Italy fell for four out of the five years (percentage change on the previous year). The decline resulted in a significant downturn in production of domestic appliances.
In recent years, Whirlpool invested in the Spini di Gardolo site. However, these investments did not pay off due to the decline in demand for major household appliances and the consequent decrease in production (-210,000 units between 2008 and 2013, a decrease in production of 35%).
The Whirlpool Europe group developed a business plan to adapt its production structure to market demand. This plan included the closure of the Spini di Gardolo plant. On 28 June 2013, Whirlpool Europe informed the relevant stakeholders of its intention to close the Italian plant and the resulting redundancies.
The unemployment rate in Trento has doubled since the beginning of the crisis, rising from 2.9% in 2007 to 6.1% in 2013. Redundancies at Whirlpool Europe S.r.l. — one of the top employers in the area until its closure — and its suppliers and downstream producers will have a significant adverse impact on the regional economy and on the employment situation of the Provincia di Trento.
More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost jobs, particularly in vulnerable sectors and among 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 130 applications. Some €536 million have already been requested to help more than 116,000 workers. In 2013 alone, it provided more than €53.5 million in support.
The Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope includes workers made redundant because of the economic crisis, as well as fixed-term workers, the self-employed, and, by way of derogation until the end of 2017, young people not in employment, education or training (NEETs) residing in regions eligible under the Youth Employment Initiative (YEI) up to a number equal to the redundant workers supported.
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