Brussels, 11 September 2014
Employment: Commission proposes €12.7 million from Globalisation Fund for former workers of Peugeot Citroën Automobile (PSA) in France
The European Commission has proposed to provide France with €12.7 million from the European Globalisation Adjustment Fund (EGF) to help 2,357 workers made redundant by carmaker Peugeot Citroën Automobile (PSA) to find new jobs. The redundancies mainly concern the Aulnay plant (Île-de-France), to be closed, and the Rennes plant (Brittany). The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.
EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "As a consequence of globalisation, the European car industry is going through major structural changes. Redundancies like those in France are major shocks to regional economies and many workers in the motor industry are experiencing hardship. Today's proposal for €12.7 million from Europe's Globalisation Fund demonstrates EU solidarity with these workers, and would help them get new skills, find new jobs or start their own business".
France applied for support from the EGF following the dismissal of 6,120 workers at PSA. These redundancies were the result of a rapid decline of the EU’s share of the global passenger car market.
The measures co-financed by the EGF would help the 2,357 workers facing the greatest difficulties in finding new jobs by providing them with active career guidance, thematic workshops, a variety of training and upskilling schemes, and grants for business creation. The EGF measures are in addition to wide-ranging programmes carried out by PSA in the affected regions as part of its statutory obligations following mass redundancies.
The total estimated cost of the package is €21.1 million, of which the EGF would provide 60%.
The EU's share of the global passenger vehicles market has been shrinking in recent years, according to the International Organization of Motor Vehicle Manufacturers (OICA). From 2000 to 2013, it declined from 29.4 % (by EU-15, out of a world total of 58.3 million) to 18.5 % (by EU-27, out of a world total of 87.3 million).
However, world production continued to grow at a sustained pace, despite the effects of the global financial and economic crisis. Within this continued growth, major disparities have emerged between the countries where car production has traditionally been established, and the more recent producers. Thus, from 2000 to 2012, production declined by 11 % in the US, by 25 % in Western Europe and by 2 % in Japan. At the same time, production in South Korea, China, Turkey, Indonesia, Iran, Malaysia, Thailand and South America grew significantly and now constitutes 47 % of world vehicle production, up from 16 % in 2000, according to a report by the Comité des Constructeurs Français d'Automobiles.
The redundancies have a significant adverse impact on the local and regional economy in the affected areas. In Aulnay, PSA was the 8th largest employer and the redundancies reduced the employed workforce in the area by 13.6 %. In Rennes, the reduction was less steep, but the region has already been affected by a general economic decline, with the number of unemployed people in Brittany as a whole doubling within the past five years.
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 starting operations in 2007, the EGF has received 128 applications. Some €523 million has been requested to help more than 111,000 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 in regions of high youth unemployment.
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