EUROPEAN COMMISSION

Brussels, 14.7.2015

COM(2015) 342 final

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund
(application from Germany – EGF/2015/002 DE/Adam Opel)

EXPLANATORY MEMORANDUM

CONTEXT OF THE PROPOSAL

1.The rules applicable to financial contributions from the European Globalisation Adjustment Fund (EGF) are laid down in Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006 1 (the ‘EGF Regulation’).

2.On 26 February 2015, Germany submitted application EGF/2015/002 DE/Adam Opel for a financial contribution from the EGF, following redundancies 2 in Adam Opel AG and one supplier in Germany.

3.Following its assessment of this application, the Commission has concluded, in accordance with all applicable provisions of the EGF Regulation, that the conditions for awarding a financial contribution from the EGF are met.

SUMMARY OF THE APPLICATION

ASSESSMENT OF THE APPLICATION

Procedure

4.Germany submitted application EGF/2015/002 DE/Adam Opel on 26 February 2015 within 12 weeks of the date on which the intervention criteria set out in Article 4 of the EGF Regulation were met. The Commission acknowledged receipt of the application within two weeks of the date of submission of the application, on 12 March 2015, and requested additional information from Germany on the same date. Such additional information was provided within six weeks of the request. The deadline of 12 weeks of the receipt of the complete application within which the Commission should finalise its assessment of the application's compliance with the conditions for providing a financial contribution expires on 16 July 2015.

Eligibility of the application

Enterprises and beneficiaries concerned

5.The application relates to 2 881 workers made redundant by Adam Opel AG and one supplier. The primary enterprise operates in the economic sector classified under the NACE Revision 2 Division 29 (Manufacture of motor vehicles, trailers and semi-trailers). The redundancies made by the primary enterprise are mainly located in the NUTS 5 level 2 region of Arnsberg (DE A5).

Intervention criteria

6.Germany submitted the application under the intervention criteria of Article 4(1)(a) of the EGF Regulation, which requires at least 500 workers being made redundant over a reference period of four months in an enterprise in a Member State, including workers made redundant by suppliers and downstream producers and / or self-employed persons whose activity has ceased.

7.The reference period of four months for the application runs from 15 August 2014 to 15 December 2014.

8.The redundancies during the reference period are as follows:

–2 826 workers made redundant in Adam Opel AG,

–55 workers made redundant in Johnson Controls Objekt Bochum GmbH & Co. KG, a supplier of Adam Opel AG.

Calculation of redundancies and of cessation of activity

9.The redundancies during the reference period have been calculated as follows:

–2 881 from the date of the employer's individual notice to lay off or to terminate the contract of employment of the worker.

Eligible beneficiaries

10.The total number of eligible beneficiaries is 2 881.

Link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009

11.In order to establish the link between the redundancies and the global financial and economic crisis addressed in Regulation (EC) No 546/2009, Germany argues that due to the crisis, the number of cars sold in Europe is the lowest since 1997. In Western Europe sales dropped dramatically and reached a 20-year record low 6 . As a consequence of the financial and economic crisis, the number of newly registered cars in the EU and EFTA Member States saw a 25 % drop between 2007 and 2013 (from more than 16 million newly registered cars down to 12 million, according to the European Automobile Manufacturers Association). Manufacturers of small and medium-sized vehicles of the medium-price segment have been hit particularly hard, whereas sales of economy as well as of premium or luxury vehicles were not as much affected by the crisis. The German Automobile Manufacturers Association (Verband der Automobilindustrie) reports a sharp drop in market share for all relevant manufacturers on the European market of small and medium-sized vehicles within the medium-price segment, such as Opel, Fiat, PSA, Renault (excluding Dacia), Ford and Toyota, since 2007. In addition to the overall drop in car sales, a shift from medium-priced vehicles to economy vehicles could be observed. The sharp drop in overall car sales can be attributed to the ongoing economic and financial crisis. Between 2007 and 2013, EUROSTAT reports a significant rise of unemployment within the EU (7,2 % in 2007 to 10,8 % in 2013), which is likely to have had an impact on consumer spending.

12.Adam Opel AG, a German car manufacturer acquired by General Motors in 1931, is selling its Opel and Vauxhall-branded cars primarily on the European market and is one of the major players in the medium-price segment of small and medium-sized vehicles. Adam Opel AG has thus been hit particularly hard by the crisis. As a consequence of the developments described above, Opel/Vauxhall car sales in Europe dropped dramatically. Between 2007 and 2013, sales fell by 39 %.

13.As a consequence of the sharp decline of car cales, Adam Opel AG faced the problem of overcapacities. As the fixed costs of operating a production plant remained equal, a reduction of the number of produced vehicles meant rising production costs per vehicle and thus a reduced margin. Adam Opel AG currently operates five plants for the production of Opel and Vauxhall cars in Europe: two in Germany (the third plant, Bochum, has been shut down since 31 December 2014 and is the subject of this proposal), and one each in Poland, the United Kingdom and Spain.

14.To date, the NACE Revision 2 Division 29 sector (Manufacture of motor vehicles, trailers and semi-trailers) has been the subject of 21 EGF applications, 11 of which based on trade related globalisation and 10 on the global financial and economic crisis. In many of these cases, both criteria (globalisation and crisis) in varying degrees influenced the decision to lay off workers. It is then up to the Member State to determine which was the principal cause in a specific application and to provide a reasoned analysis of the link between the redundancies and that particular criterion, showing a clear causality.

Events giving rise to the redundancies and cessation of activity

15.The event giving rise to these redundancies is the complete shutdown of Adam Opel AG’s production plant in Bochum. Between 2007 and 2013, Opel reduced the production volumes of the Bochum plant by 55 %. Overproduction caused by a sharp drop in car sales as a consequence of the financial and economic crisis forced Adam Opel AG to readjust its production capacities in Europe in order to match them to demand. The ensuing restructuring process led to the closure of the Opel production facility in Antwerp, Belgium. The closure of the Antwerp plant was the subject of application EGF/2010/031 BE/Generals Motors Belgium, which Belgium based on the crisis criterion. The continuation of the global financial and economic crisis pressurised Adam Opel AG to downsize its production capacities again and to close one of its remaining factories. As the lines of cars produced in its Bochum plant were about to reach the end of their respective production cycles, Adam Opel AG decided to shut down this particular factory.

16.In February 2013, Adam Opel AG tried to seek a collective agreement with its German workforce, offering the continuation of all German production plants and guaranteed employment of all workers in Germany until the end of December 2016. The production plant in Bochum would be shut down by the end of that period. The social partners of all production plants concerned, except Bochum, agreed to the plan. As concerns the Bochum production plant, which still employed a workforce of 3 280 in 2013, Adam Opel AG continued negotiations with Gewerkschaft IG Metall metal workers. A further reduction in car sales forced Adam Opel AG to close the Bochum production facility earlier than originally planned. In June 2014, the social partners agreed to the closure of the plant as end of December 2014 and the creation of a transfer company. In August 2014, all workers were offered agreements to benefit from the services of transfer companies. 2 637 of them signed a tripartite agreement to be employed by a transfer company upon the end of their employment with Adam Opel AG.

17.The creation of a transfer company is not mandatory under German law. There is no obligation on the part of the dismissing company to contribute towards the creation of a transfer company. Without the participation of the dismissing company, no transfer company would be set up, and the dismissed personnel would be unemployed. If the dismissing company does offer to participate, and if the social partners agree to the creation of a transfer company, German social law sets the legal frame (§§ 110 and 111,SGB III).

18.Due to the closure of the plant of Adam Opel AG, its supplier Johnson Controls Objekt Bochum GmbH&Co. KG had to adjust its production capacities likewise and decided to close down the production facilities for Opel components. On 23 September 2014, the social partners agreed to a social plan. As a consequence, 55 workers were dismissed. The social plan does not comprise the creation of a transfer company and the redundant personnel is unemployed.

Expected impact of the redundancies as regards the local, regional or national economy and employment

19.The redundancies have a significant adverse impact on the local economy in Bochum. Bochum is a city in the Ruhr area, a highly urbanised industrial area in the German Federal State of North Rhine-Westphalia. The Ruhr area, traditionally a coal-mining and steel producing region, has been facing tremendous structural challenges since the 1960s. Whereas in the 1980s the coal mining sector still employed more than 100 000 workers, this number has dropped by about 90 %. Coal mining in the Ruhr area is expected to cease operations by 2018, when the government subsidies finally end. The unemployment rate in the Ruhr area already reaches levels far above the German average. The unemployment rate in the city of Bochum is currently 11 % (28 809 unemployed citizens are registered with the local Public Employment Service). The absence of a transfer company in the case of Opel would have caused a rise in the number of unemployed people by more than 5 %. More than 25 % of the redundant personnel is aged over 55 and would thus have an even more signifant impact on the number of unemployed of that particular age group (in Bochum, there are currently 4 940 unemployed registered over the age of 55).

Targeted beneficiaries and proposed actions

Targeted beneficiaries

20.The estimated number of redundant workers expected to participate in the measures is 2 692. The breakdown of these workers by sex, citizenship and age group is as follows:

Eligibility of the proposed actions

21.As set out above, the social partners agreed on the creation of transfer companies and entrusted TÜV Nord Transfer GmbH with the creation of three transfer companies, catering to three different batches of redundant workers of the Adam Opel AG Bochum plant. This is necessary as a total of 188 workers are part of a closure team whose job is to wind up the facilities. Whereas the major part of dismissed workers entered the first transfer company on 1 January 2015, members of the closure teams enter the second and third company on 1 April and 1 July 2015, respectively. According to the social plan, Adam Opel AG agreed to offer additional measures for its former employees and these offers and additional measures are provided by the transfer company, but are not part of the EGF application. As soon as the German authorities are sufficiently confident that EGF funding is likely to be forthcoming, the 55 dismissed former workers of Johnson Controls Objekt Bochum GmbH & Co. KG will be offered to participate in the measures carried out by the transfer companies. They will not be signing an employment contract with the transfer company, but will be allowed to participate in the EGF financed measures carried out by the transfer company. All of the following measures combine to form a package of personalised services coordinated by the transfer companies and aimed to re-integrate the redundant workers into employment:

–Vocational training measures (Qualifizierungen): These are offered to eligible workers following profiling and career guidance interviews, and with the intention of helping them to benefit from opportunities in the labour market. Training courses offered will focus on sectors with future prospects, such as IT, transport, logistics or electronics. Courses can be provided individually or in groups, and they range from basic competences to upskilling courses and courses preparing the participants for career changes and work in other sectors or for starting up their own businesses.

–Career Guidance (Berufsorientierung): This package will include various instruments such as job market analyses, job search, dissemination of knowledge of self-marketing strategies, job application as well as job interview training.

–Peer groups / workshops: These will be group fora assisted by a facilitator, helping participants to exchange ideas and reflections. Peer groups may focus on a range of topics, such as time management, self-management, labour law, promotion of health measures or learning techniques.

–Business start-up advisory service (Existenzgründerberatung): This will comprise a package of advisory services for those interested in starting their own businesses. These services will include individualised taylor-made coaching measures.

–Job Search (Stellenakquise) / job fairs (Jobmessen): professional job scouts will help to locate potential job vacancies not yet published, which might suit eligible workers. Events such as job fairs will be organised to facilitate contacts between potential employers and candidates.

–Follow-up mentoring and advisory services (Nachbetreuung und - beratung): workers can benefit from further guidance counselling services after taking up new employment in order to facilitate transition into a new job and to minimise the risk of a job loss.

–Training allowance (Transferkurzarbeitergeld): this amounts to 60 % of the worker’s previous net income, or 67 % if one or more children are resident in the recipient’s household. It is payable for up to twelve months from the date when the worker enters the transfer company.

22.The proposed actions, here described, constitute active labour market measures within the eligible actions set out in Article 7 of the EGF Regulation. These actions do not substitute passive social protection measures.

23.Germany has provided the required information on actions that are mandatory for the enterprise concerned by virtue of national law or pursuant to collective agreements. They have confirmed that a financial contribution from the EGF will not replace such actions.

Estimated budget

24.The estimated total costs are EUR 11 597 706, comprising expenditure for personalised services of EUR 11 151 640 and expenditure for preparatory, management, information and publicity, control and reporting activities of EUR 446 066.

25.The total financial contribution requested from the EGF is EUR 6 958 623 (60 % of total costs).

26.The costs of the actions identified in the table above as actions under Article 7(1)(b) of the EGF Regulation do not exceed 35 % of the total costs for the coordinated package of personalised services. Germany confirmed that these actions are conditional on the active participation of the targeted beneficiaries in job-search or training activities. Only documented activities may be taken into account and Germany will take care to provide an audit trail.

Period of eligibility of expenditure

27.Germany started providing the personalised services to the targeted beneficiaries from 1 January 2015. The expenditure on the actions referred to above shall therefore be eligible for a financial contribution from the EGF from 1 January 2015 to 26 February 2017.

28.Germany started incurring the administrative expenditure to implement the EGF as from 1 January 2015. The expenditure for preparatory, management, information and publicity, control and reporting activities shall therefore be eligible for a financial contribution from the EGF from 1 January 2015 to 26 August 2017.

Complementarity with actions funded by national or Union funds

29.The sources of national pre-financing or co-funding are the Federal budget and Bundesagentur für Arbeit (Federal Public Employment Service). These fund the national contribution of 40% of the total costs of EGF financed measures offered by the transfer company. The personalised services start with the entrance of the workers into the transfer company, which is initially financed by the German government and the dismissing company. Workers are paid training allowances (the "Transferkurzarbeitergeld"), which are eligible for EGF while the redundant workers follow active labour market policy measures (which do not have to be co-funded by the EGF, and which during the initial period are funded by the transfer company mechanisms set out above). The additional EGF-financed active labour market policy measures start at a later date, once the German EGF authorities perceive a degree of certainty that their EGF application is likely to succeed.

30.Germany has confirmed that the measures described above receiving a financial contribution from the EGF will not also receive financial contributions from other Union financial instruments.

Procedures for consulting the targeted beneficiaries or their representatives or the social partners as well as local and regional authorities

31.Germany has indicated that the co-ordinated package of personalised services has been drawn up in consultation with the social partners as set out above.

Management and control systems

32.The application contains a description of the management and control system which specifies the responsibilities of the bodies involved. Germany has notified the Commission that the financial contribution will be administered by the same bodies within the Federal Ministry for Labour and Social Affairs (Bundesministerium für Arbeit und Soziales) which administer the ESF. However, within the 'Gruppe Europäische Fonds für Beschäftigung', it is the 'Referat EF 4' which acts as the managing authority for the EGF, while the managing authority for the ESF is 'Referat EF 1'. The 'Organisationseinheit Prüfbehörde' is the control authority for both EGF and ESF. These bodies also administered the previous EGF contributions to Germany.

Commitments provided by the Member State concerned

33.Germany has provided all necessary assurances regarding the following:

–the principles of equality of treatment and non-discrimination will be respected in the access to the proposed actions and their implementation,

–the requirements laid down in national and EU legislation concerning collective redundancies have been complied with,

–the dismissing enterprises, which have continued their activities after the lay-offs have complied with their legal obligations governing the redundancies and provided for their workers accordingly,

–the proposed actions will not receive financial support from other Union funds or financial instruments and any double financing will be prevented,

–the proposed actions will be complementary with actions funded by the Structural Funds,

–the financial contribution from the EGF will comply with the procedural and material Union rules on State aid.

BUDGETARY IMPLICATION

Budgetary proposal

34.The EGF shall not exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/2013 of 2 December 2013 laying down the multiannual financial framework for the years 2014-2020 7 .

35.Having examined the application in respect of the conditions set out in Article 13(1) of the EGF Regulation, and having taken into account the number of targeted beneficiaries, the proposed actions and the estimated costs, the Commission proposes to mobilise the EGF for the amount of EUR 6 958 623, representing 60 % of the total costs of the proposed actions, in order to provide a financial contribution for the application.

36.The proposed decision to mobilise the EGF will be taken jointly by the European Parliament and the Council, as laid down in point 13 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management 8 .

Related acts

37.At the same time as it presents this proposal for a decision to mobilise the EGF, the Commission will present to the European Parliament and to the Council a proposal for a transfer to the relevant budgetary line for the amount of EUR 6 958 623.

38.At the same time as it adopts this proposal for a decision to mobilise the EGF, the Commission will adopt a decision on a financial contribution, by means of an implementing act, which will enter into force on the date at which the European Parliament and the Council adopt the proposed decision to mobilise the EGF.

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the mobilisation of the European Globalisation Adjustment Fund
(application from Germany – EGF/2015/002 DE/Adam Opel)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006 9 , and in particular Article 15(4) thereof,

Having regard to the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management 10 , and in particular point 13 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The European Globalisation Adjustment Fund (EGF) aims to provide support for workers made redundant and self-employed persons whose activity has ceased as a result of major structural changes in world trade patterns due to globalisation, as a result of a continuation of the global financial and economic crisis, or as a result of a new global financial and economic crisis, and to assist them with their reintegration into the labour market.

(2)The EGF is not to exceed a maximum annual amount of EUR 150 million (2011 prices), as laid down in Article 12 of Council Regulation (EU, Euratom) No 1311/2013 11 .

(3)On 26 February 2015, Germany submitted an application EGF/2015/002 DE/Adam Opel for a financial contribution from the EGF, following redundancies in Adam Opel AG and one supplier in Germany. It was supplemented by additional information in accordance with Article 8(3) of Regulation (EU) No 1309/2013. That application complies with the requirements for determining a financial contribution from the EGF in accordance with Article 13 of that Regulation.

(4)The EGF should, therefore, be mobilised in order to provide a financial contribution of EUR 6 958 623 in respect of the application submitted by Germany.

(5)In order to minimise the time taken to mobilise the EGF, this decision should apply from the date of its adoption,

HAVE ADOPTED THIS DECISION:

Article 1

For the general budget of the European Union for the financial year 2015, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 6 958 623 in commitment and payment appropriations.

Article 2

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply from [the date of its adoption] 12*.

Done at Brussels,

(1) OJ L 347, 20.12.2013, p. 855.

(2) Within the meaning of Article 3 of the EGF Regulation.

(3) OJ L 393, 30.12.2006, p. 1.

(4) In accordance with the fourth paragraph of Article 7 of Regulation (EU) No 1309/2013.

(5) Commission Regulation (EU) No 1046/2012 of 8 November 2012 implementing Regulation (EC) No 1059/2003 of the European Parliament and of the Council on the establishment of a common classification of territorial units for statistics (NUTS) as regards the transmission of the time series for the new regional breakdown (OJ L 310, 9.11.2012, p. 34).

(6) European Automobile Manufacturers Association (ACEA), The Automobile Industry Pocket Guide 2014-2015, p. 57f.

(7) OJ L 347, 20.12.2013, p. 884.

(8) OJ C 373, 20.12.2013, p. 1.

(9) OJ L 347, 20.12.2013, p. 855.

(10) OJ C 373, 20.12.2013, p. 1.

(11) Council Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 (OJ L 347, 20.12.2013, p. 884).

(12)  Date to be inserted by the Parliament before the publication in OJ.