Economic and social consequences of restructuring in the automobile sector in Europe (debate) 
President
The next item is the Commission statement on the economic and social consequences of restructuring in the automobile sector in Europe.
Vladimír Špidla
Member of the Commission. (FR) Mr President, ladies and gentlemen, the restructuring plan announced in November by Volkswagen to the board of the company's Belgian division and to the press will have a major social and economic impact within and beyond the company. Allow me to express, first of all, my very great concern about the consequences that this plan is likely to have for several thousand workers and their families, as well as for the company's economic and social environment.
Restructuring is sometimes necessary in order to ensure companies' competitiveness and survival and, in the last analysis, in order to preserve jobs. I am aware of the need for Volkswagen, in common with many other European companies in the sector, to engage in restructuring. It is important, however, to ensure that this process is well planned and well administered in order to minimise its economic and social costs. That is why, in March 2005, the Commission adopted a communication entitled 'Restructuring and Employment', which set out the main features of a proactive strategy to which you have entirely subscribed, namely anticipation, partnership and the coordination of policies and instruments.
As soon as Volkswagen's management announced the restructuring, the Commission made every effort to mobilise the instruments at its disposal. I met the members of the Belgian Government in order to convey to them our solidarity and to emphasise the importance of complying with the applicable rules under Community law, particularly the directives on informing and consulting the workers' representatives. My colleague, Mrs Hübner, and myself also made it known that the services of the Commission were available to make flexible use of the instruments of financial support, in particular the Structural Funds, in order to help workers affected by the restructuring. The European Social Fund has shown in the past to what degree prompt and targeted action may help reintegrate into the labour market workers laid off following company restructuring.
The services of the Commission have been invited to participate in the crisis unit set up by the Belgian authorities. This will examine, among other aspects, the practical possibilities of using credits: either those remaining from the current programme expiring at the end of 2006 or those, constituting larger available funds, that will be available under the new programmes entering into force as from 2007. In any case, I can convey to you the Commission's desire to be proactive and as flexible as possible regarding the use made of the European budget.
On 24 November, the Commission convened its 'restructuring' task force, founded in March 2005 when the 'Restructuring and Employment' communication was issued. The purpose of the meeting was to mobilise all the instruments at its disposal in order to reduce the impact of the restructuring measures taken in conjunction with the Belgian authorities and to make developments in the automobile sector part of a future strategy in Europe. The automobile sector is vital to Europe, accounting for 3% of European GDP and employing 12 million people. It makes a crucial contribution to research and development efforts and, each year, creates a trade surplus with the rest of the world of approximately EUR 25 billion. In common with all other sectors of the economy, the automobile sector has to confront some profound changes. It has nonetheless been able to adapt to the major developments with which it is faced. The figures I have mentioned bear this out.
Irrespective of the specific case that concerns us today, restructuring in the automobile sector is, in general, part of a necessary effort at adaptation. However, the Commission neither wants, nor is able, to assume the company's own obligations and responsibilities in the process of restructuring that has been undertaken. I personally have written to the president of the Volkswagen group to inform him of our concerns and to ask him to do everything possible in order to minimise the economic and social costs of the restructuring that has been announced. I reminded him of the need to ensure that the Community directives on informing and consulting workers are complied with throughout the Member States. These Community documents specify the need to inform and consult appropriately placed workers' representatives in advance about any transfer of production and the redundancies involved. It is crucial to ensure the quality of any information provision or useful consultation at the appropriate level, whether it be about economic decisions or the consequences of these in terms of employment.
I would also point out that, in 2003, in response to a Commission consultation on this subject, the European social partners jointly prepared guidelines for administering change and its social consequences. These guidelines state that a positive attitude to change and the existence of high-quality social dialogue in a climate of confidence are important factors for preventing or limiting the harmful social consequences of restructuring. The implementation of these guidelines is essential if we are to achieve Community objectives of anticipation and of support during periods of change. That is why, in March 2005, the Commission again contacted the European social partners and asked them to devise efficient methods of developing these guidelines everywhere in Europe and of ensuring their application. I intend shortly to meet the representatives of the social partners in order to consider with them the means of making faster and more effective progress along these lines.
To return to the case that has given rise to this debate, it is now important to make room for negotiation within the group that is being restructured. There have recently been signs that the partners concerned - management and worker representatives - are committed to a serious debate on the industrial future of the various sites in Europe, as well as on the social measures to be put in place. While maintaining its offer of support, the Commission intends to respect the autonomy of the social dialogue beginning within the group. Within the limits of its competence, the Commission is taking initiatives and making available the resources available to it. In the current circumstances, I hope for nothing other than the firm commitment of all the parties to move in this same direction.
Ivo Belet
on behalf of the PPE-DE Group. - (NL) Mr President, Commissioner, I should first of all like to extend a warm welcome to the workers of Volkswagen Vorst, the suppliers and their representatives, who are present here in the gallery, and I should also like to express our genuine solidarity with them in these difficult times.
Ladies and gentlemen, in the past few days, rather flippant statements have been made to the effect that, in cases like these, politics is powerless, but I see that as rather prejudging the situation.
Politics can very much hold a grip on a number of important factors. First of all, the national government is very much able, by means of reliable and good governance, to create scope for keeping the burden on labour, the premiums in this case, to an absolute minimum and thus protecting our industry's competitiveness.
Europe, too, should shoulder its share of responsibility. Thousands of workers are losing their jobs, and we should at the very least learn from this. This presents Europe, Commissioner, with a unique opportunity to show off its social side. The common European market, while economic in nature, also requires a social dimension. That much is clear. So we must now do what we can to reinforce this social dimension in the short term.
First of all, by ensuring that the workers affected can rely on support from the new European Fund for globalisation without delay. We, the Christian Democrats in this House, are 100% behind this objective of the Fund, and we are counting, Commissioner, on the Commission's loyal support in this. What matters most is that every effort is made to ensure that the Fund can start on time.
Secondly, we must also bring about real worker participation, which will in any case involve the evaluation of the 1994 European Directive in which this is enshrined. Commissioner, you have already made reference to the Commission communication of March last year. Well, let us seize the social tragedy at VW Vorst to make the necessary changes to the directive.
I firmly believe in the future of the European automotive industry, but we must do everything we can - and this is how I would like to finish off - in order to produce energy-efficient and 100% environmentally friendly cars. I hope that the Audi A1 will be such a car and that it will be produced at the Vorst plant, thereby guaranteeing its future, despite the dark clouds that are gathering above it now.
Stephen Hughes
on behalf of the PSE Group. - Mr President, I have three brief points. I am pleased to see that the Commission is looking to use the structural funds to help deal with the social implications of this dreadful development. However, questions have been raised over whether the Globalisation Adjustment Fund can be used or not. Well, I hope this week's news that Volkswagen is to build plants in both India and Russia will show that there are global considerations and that the fund will be used to intervene.
Second, I welcome news that production of the Audi A1 might move to the Forest plant to save some jobs, but the workforce has already been warned that such a move must involve a drop in labour costs. I hope this does not turn out to be a cynical move by VW, taking away with one hand and giving back with another, but in the meantime dramatically driving down wages and terms and conditions. VW should be aware that we will be watching developments very closely in the months ahead.
Finally, a question to the Commissioner. If the directive creating a general framework on information and consultation and the European works council directives are in force and are being observed in Belgium, how can this news have come as a shock last week? Unless the Commission assiduously ensures the application and enforcement of social laws, social Europe will fall into total disrepute, and citizens will quite rightly turn their backs on the EU.
I am glad to hear, Commissioner, that you are now taking action, but quite frankly it is a little late for the workers at Forest.
Finally, I hope that the PPE-DE Group is solidly behind the Globalisation Adjustment Fund. That is not what I have been hearing. I hope we see full support in the vote two weeks from now.
Jean Marie Beaupuy
on behalf of the ALDE Group. - (FR) Mr President, Commissioner, in the debate that we are having at present, it is important not to get everything mixed up and not to confuse all the various responsibilities. Acting, as we are, at European Union level, we must demonstrate the resources available to us at this level in order to contribute to the best possible solution to problems of this kind, whether in the metalworking industry or in other branches of activity.
As you said, Commissioner, just now when you began to speak, there are two aspects. On the one hand, there are the companies and, if we want employment at EU level to be maintained over time, we need successful companies. On the other hand, there are the employees, who are in need of help. Through the European Regional Development Fund (ERDF), the European Social Fund (ESF) and very soon, I hope, the European Monetary Fund (EMF), the European Union has the resources to help every worker individually with re-training, returning to work or starting his or her own business. This customised help provided by the European Union needs to be publicised by the media when you issue your communications so that our fellow Europeans might be fully aware of the action taken by the EU.
What is more, it is crucial, as you have said, to be able to respond promptly. If a number of sectors of the automobile industry - at present, it is Volkswagen - need our funds, the important thing is to help the employees extremely swiftly so that the aid we offer is genuinely useful and enables them to find other jobs quickly.
Pierre Jonckheer
on behalf of the Verts/ALE Group. - (FR) Mr President, the Volkswagen trade unionists in Parliament this afternoon told us that, although their first priority was to obtain an industrial plan from the motor manufacturer's management, they were also waiting for Europe to put an end to the social and fiscal competition between Member States that drags everyone down. Almost ten years ago, the workers of Renault Vilvorde were telling us the same thing. What has changed?
Mr Špidla, I find what you are saying quite inadequate. You talk about the autonomy of the social dialogue, but you are well aware that the employers are reluctant to engage in such a dialogue. We have instruments available to us. We need to strengthen the European Works Council Directive. Parliament asked you to do this as long ago as March 2006. It is also necessary to create a European legal framework that will enable European collective negotiations to take place at sectoral and group levels. The Commission needs to exercise more control over state aid and Community funds so that they are not used for the purposes of relocation within the European Union - an eventuality already referred to in the Cottigny and Hutchinson report.
Finally, a number of taxation matters need to be harmonised - and I choose that word carefully - at European level. It is not enough to discuss a common tax base for European companies. What is needed is a minimum European rate for company taxation. Under these conditions, we might perhaps today - and, I hope, tomorrow - speak to the relevant workers in terms different from those we employed when we had to deal with the Renault case.
Francis Wurtz
on behalf of the GUE/NGL Group. - (FR) Mr President, to begin with, I should like to take this opportunity to greet a sizeable delegation in the visitors' gallery of workers from Volkswagen's Forest plant, officials from all the trade unions in the plant and representatives of subcontracting companies.
(Applause)
A large contingent from my group visited the occupied plant yesterday and engaged in lengthy talks with the workforce and union representatives. What emerged from these talks?
The first and foremost requirement, Commissioner, is to save the jobs at that location. The European Union is in a quandary for want of an industrial policy. As Mr Jonckheer has reminded us, the crisis in the European car industry is nothing new. Vilvorde happened ten years ago, and since then other plants have been closed or threatened with closure.
What has been done in the fields of research and investment policy and in the pursuit of balanced regional development? What efforts have been made to ensure that workers are trained and jobs safeguarded, to develop the clean, reliable and affordable cars that are in demand today and to diversify the economic fabric and increase the number of secure, skilled and properly paid jobs? The large manufacturing groups have been given their head in the name of sacrosanct free-market economics and unbridled competition. The immediate duty of everyone, including the European Union, is therefore to act to save these jobs at the Forest plant, not only for the workforce of the Volkswagen group but also for the 8 000 employees of subcontracting businesses. Mr Henin will pick up that point in a moment.
Secondly, if this mass mobilisation should fail, raising the issue of compensation, the Volkswagen group must be formally bound to meet its responsibilities to the full. The trade-union leaders reminded us in detail of the long list of public aid in the form of diverse exemptions that have been granted in respect of this plant to a group which, incidentally, has seen its profits rise sharply over the past two years, at least sharply enough to enable it to announce yesterday that it planned to invest hundreds of millions in Asia. In addition, it goes without saying that the European Union should contribute to the compensation.
At the heart of this affair, however, we see the need for structural changes in the economic strategy being pursued in the name of what the Commission calls a competitive Europe in a globalised economy, which, in plain words, means cutting wage costs, introducing flexible working conditions, creating 'shareholder value', in other words windfalls for shareholders, pitting workers against each other and using the threat of relocation to blackmail public authorities.
This takes us to the very core of the celebrated liberal Europe, from which more and more Europeans feel totally alienated, and with good reason. Only a break with this line of approach can open the door to a socially responsible Europe and enable us to win back the trust of our fellow citizens. Mr Barroso often makes the case for a Europe that gets results. Europe in its present state delivers results such as this one at Volkswagen Forest. We could do with more Europe, a trade unionist told us, but it is a different Europe that we need. This demand will surely be expressed forcefully in the streets of Brussels on Saturday.
(Applause)
Frank Vanhecke
(NL) Mr President, with 4 000 workers laid off at Volkswagen in Vorst and at least another 2 000 jobs lost among the suppliers, these are truly dark times in my country for the affected workers and their families.
The initial response of the Belgian Government under Prime Minister Verhofstadt has been to do what it always does, for, when there are economic successes, they are quite happy to consider them as yet another feather in their political cap, but when there are problems or setbacks, then someone else is always to blame.
In a rather xenophobic reaction, Prime Minister Verhofstadt even blamed the Germans for pursuing a kind of 'own people first' policy, which is, in my politically correct country, about the worst accusation anyone can make - ignoring the fact that in Germany, 20 000 jobs are being lost and that we, with the social tragedy at Vorst, are actually experiencing the worst so far of an enormous crisis that is enveloping the European automobile industry.
Let us be honest; nobody has a miracle cure for the tragedy that is unfolding in Europe at the moment. Before blaming others, though, our governments, and the Belgian Government in particular, should ask itself whether it has done everything in its power to rescue as many jobs as possible, today in Vorst, but previously at Renault in Vilvoorde, at DHL, Sabena and elsewhere.
Nearly eight years after my country gained a government that promised it would make this problem a priority, Belgium is still facing a wage handicap of some 10% compared to its neighbouring countries. This wage imbalance is the result of the huge tax burden.
This is not the only cause, but it is one of the reasons why the Belgian Government is to blame. I do mean the Belgian Government, for Flanders has for some time now shown the political will to use a cocktail of economic measures to make our country attractive again for investors and thus to create employment.
We, too, are in favour of the efficient use of European funds in this area, but this is not a miracle cure, and the proposals that are being made for more European bureaucracy are, in my view, counterproductive.
It is high time we all realised that our material wealth and our employment will not persist for ever of their own accord, that international competition will only intensify and that we, by being more flexible, reducing costs and creating an employer-friendly climate, really have to fight for each and every job. We must, above all, think about ways of improving the competitiveness of our businesses, also in respect of businesses from countries that enjoy hardly any, or no, social protection.
José Albino Silva Peneda
(PT) Mr President, Commissioner, relocations normally involve moving to countries where production costs are lower and employment laws are more flexible. In this case the opposite has happened: production is relocating to a country where production costs are higher and employment law is stricter. Everything suggests that this decision was not based on market rules, but most probably on power relations between the company and the trade unions.
We seem to be facing a new kind of factor that may influence future relocations, which I would term the relocation of trade union power. This kind of relocation is always directed towards the centre, in the sense that it favours the strongest. If this practice spreads, we shall be moving in a direction that clearly runs counter to the essential values of the European project, because the rules of the market are flouted, productivity is not stimulated, and the fundamental principles of solidarity and of regional and social cohesion are violated.
In view of such a practice, I fear for the future of the Volkswagen plant in Portugal. If something similar happens there, it will force us to think seriously about how to prevent a mere interest group from imposing itself on the normal operation of market rules. That is our responsibility.
Mia De Vits
(NL) Mr President, ladies and gentlemen, I do not think the political world can look on helplessly in the face of such tragedy. It goes without saying that the social effects must be cushioned, and if the globalisation fund is not intended for this purpose, then I have lost the plot.
Needless to say, Commissioner Špidla, the social dialogue must work, but it has not. There is more to it for Socialists such as ourselves.
When companies merge, the Commission checks whether competition is not distorted, but it does not examine whether restructuring operations are done on the basis of objective and economic criteria. It strikes me as more intelligent and more useful to have a Commissioner who guides restructuring operations in the right channels than to have one for multilingualism.
I would ask the House to back this idea. I am delighted that the Belgian Government will be taking these ideas to the December Council. Multinationals cannot get off scot-free. They should be called to account.
Jacky Henin
(FR) Mr President, every passing day sees the automotive industry shed hundreds of jobs. The multinationals are putting enormous pressure on their workers. They presume to use the workforce as scapegoats, challenging their acquired rights and almost implying that they are wallowing in affluence. The fact is that workers have never been more productive or less secure in their jobs at any time in the last fifty years. Not for thirty years has their purchasing power been so low. It is not the competitiveness of labour that is putting the car industry in trouble but movements of capital in search of maximum yields in the shortest possible time. Car-manufacturing groups engage in blackmail to milk the areas where their plants are located, and once they have sucked local budgets dry they start to look for pastures new where the grass is greener.
It is high time this Parliament stopped confining itself to hollow rhetoric and took tough initiatives to defend Europe's industrial potential, to hit profiteers where their heart lies, namely in their wallets, and to guarantee employees the right to genuine job security and training. These are some of the aims underlying the charter that my group is advocating as the key to the defence and development of our automotive industry.
Alain Hutchinson
(FR) Mr President, Commissioner, what we are experiencing today in spectacular fashion, in this savage decision by Volkswagen with its tragic consequences, is ultimately no more than the submerged part of the iceberg that floats on the ocean of free enterprise and free competition, which have become the watchwords of this European Union. Every day, in fact, hundreds of jobs disappear in the wake of relocations and of numerous restructuring measures, although these jobs, of course, are axed more discreetly. And no parallel moves, or desperately few, are made to bolster the industrial and social policies that are trampled under foot on these occasions.
This Parliament, Commissioner, has recently adopted resolutions on both relocations and corporate restructuring. When will the Commission and the Council have the decency at least to respond to these resolutions, to express at least a modicum of interest in them, which they have not yet done? It is certainly important today to provide active, effective and pragmatic support to the victims of this new closure, but it is equally important to ensure that we move on tomorrow from words to action in this European Union, which will have to come to grips with this problem in a more resolute manner. The Union has fallen victim to a policy it wished on itself.
Véronique De Keyser
(FR) Mr President, is it ludicrous to hold a debate without a resolution on Volkswagen today with one minute per speaker? No, it is shameful. What sort of tragedy has to occur before the Commission proceeds with the revision of the Works Council Directive, which it is still blocking? Did you pay heed to the Hutchinson report on relocations? Will you allow Volkswagen to benefit from the European Globalisation Adjustment Fund? No, the reason why the Volkswagen plant is threatened with closure is not that liberalism has been malfunctioning; it is because there is still no social regulation of the market in Europe today.
To the Right, which opposes any legislation in this domain, let me say that there will be a social Europe; it will be created in spite of everything; it will be forged in blood and tears, but it will be created. I call today not only for a Commissioner for corporate restructuring measures but also for a Volkswagen Directive, for the sake of the entire Forest workforce and for all those who, in my region and in yours, ladies and gentlemen, are losing faith in Europe and in politics.
Jean Louis Cottigny
(FR) Mr President, the European social model, the Lisbon Strategy, a Social Europe: what meaning is left in these words, which are nothing but empty promises in the reddened eyes of Volkswagen employees and their families? Precarious existences have become the norm, and pitting employees against each other has become a managerial strategy, like redundancies and unemployment. An ever-growing number of workers accept life on the brink of the abyss because they have no alternative.
Europe was built on foundations of peace, but social strife is being fomented, with tragic consequences in terms of human distress, growing distrust of the European Union and an upsurge in support for extremist parties in every election. Are we to allow 4 000 jobs to be axed with impunity on the doorstep of our institutions, and more than 10 000 people to be put out of work, by a group that has simultaneously been announcing plans to set up a plant in India?
European funds will have to be mobilised, including the new Globalisation Adjustment Fund. We shall see to that, perhaps by tabling a Volkswagen amendment - why not? It is high time workers were respected in Europe, in the European Parliament and on our doorstep.
Vladimír Špidla
Member of the Commission. (CS) Honourable Members, the case of the Volkswagen Forest is, of course, the kind of case that has accompanied market economics throughout its history. I feel that if we want to guarantee employment, the Lisbon Strategy is the right way forward, because its core objectives are knowledge-based competitiveness and the creation of high-quality jobs. I feel that this is the right strategy and we must implement it.
The question of how to respond effectively to the Volkswagen situation is a different matter. It is clear that there are different responsibilities at company, local authority, national state and EU levels. All of these capacities should be mobilised responsibly. I am pleased that the EU institutions have responded rapidly, and, to my mind, effectively; they have provided their resources in such a way that their response has been both responsible and effective. It is also clear that social dialogue has a major role to play. I understand that social dialogue negotiations are ongoing, and that they have reached an important stage. If Europe is to sustain an effective social dimension it is, obviously, vital that the legislation in force in this area be adhered to. The Commission has therefore launched an inquiry into whether the directives concerned are being rigorously complied with. I believe that this will genuinely help to resolve this matter.
Honourable Members, we have heard a broad range of ideas and suggestions developed from a number of different perspectives in this debate. It is clear that we have obligations arising from our responsibilities, from the Treaty and from effective European construction. I am sure that each case will open up a debate that may help to enhance the legal framework, and to change our processes and the way in which we respond, all of which is indicative of a functioning and thriving Europe.
I should like, if I may, to return to the beginning. At this time we must mobilise the resources at our disposal, and at EU level, this is already under way.
President
The debate is closed.
Written statement (Rule 142)
Ilda Figueiredo
(PT) The threat hanging over the 4 000 Volkswagen workers in Belgium shows that multinationals continue to act utterly irresponsibly, motivated solely by the desire to make ever-greater profits. They are completely indifferent to the social hardship and regional development problems they cause through regarding their workers as mere numbers and as cogs in a machine that are only of interest for the profits they can generate. This situation is an integral part of the process of international trade, liberalisation and labour market deregulation that the European Union supports and encourages.
The situation is the same as that affecting thousands of workers in Portugal, particularly at Opel/GM in Azambuja, Johnson Controls, Lear and so many other companies.
It is time to adopt measures to put an end to this situation once and for all and to guarantee firmer action to protect workers' rights. These measures must also ensure that European works councils are fully involved in decision-making processes, including the right to stop dismissals and relocations, and that there is effective control over Community funds allocated to such multinationals, thus forcing them to comply with all their workers' rights.
