Brussels, 5 March 2014
Employment: Commission proposes €1.9 million from Globalisation Fund to help redundant workers in the Spanish car industry
The European Commission has proposed to provide Spain with €1.9 million from the European Globalisation Adjustment Fund (EGF) to help 285 former workers of the car manufacturer Grupo Santana in Andalucía find new jobs. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
EU Commissioner responsible for Employment, Social Affairs and Inclusion, László Andor, commented: "Car production in Europe has dropped dramatically and the car industry is facing major structural changes to respond to globalisation. Many workers in the motor industry are experiencing hardship and EU solidarity is therefore important to help them manage this difficult transition. The €1.9 million we have proposed would help these redundant workers to adapt their skills and make it easier for them to find a new job or set up their own enterprises".
Spain applied for support from the EGF for 285 former workers of Grupo Santana, a Spanish manufacturer of 4 wheel drive vehicles. The package is designed to help the workers by offering them upskilling, vocational and on-the-job training and training allowances.
The total estimated cost of the package is approximately €3.9 million, of which the EGF would provide half.
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 from which EU producers are less able to benefit, being traditionally less well positioned in these areas.
The Santana Group business model combined production of own-brand vehicles, such as the jeep "Anibal Santana", which has been sold to several European armies such as the French and the Czech, and manufacture and assembling of vehicles for other manufacturers such as the Italian Iveco group or the Japanese Suzuki.
Strategic decisions taken by Santana's main customers ended in a cancellation or no-renewal of the on-going contracts, as they prioritized producing close to the new emerging markets, in particular in India or China. Despite actions taken to revive the company and negotiations in view of a takeover, no agreement was reached and Santana Group ended in bankruptcy and closure.
The redundancies concern the province of Jaen (Andalucía region). The gross regional product (GDP) per capita of Jaen is 69,8 % of EU average. The employment rate of people aged 16-64 decreased from 56,1 % in 2007 to 48.8 % in 2011, when the number of employed people fell from 235,767 to 209,047. During the same period the unemployment rate rose from 13 % to 27.9 %, and from 21.13 % to 48.6 % for those under 25 years.
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's 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 118 applications. Some €500 million has been requested to help more than 106,000 workers. EGF applications are being presented to help in a growing number of sectors, and by an increasing number of Member States. Last year alone, it provided more than €73.5 million (IP/13/1076).
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 Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope has been expanded to include again workers made redundant because of economic crisis, as well as fixed-term workers, the self-employed, and young people not in employment, education or training in regions of high youth unemployment.
Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion