Car workers in Austria to get help from EU Globalisation Fund

The European Commission has today approved an application from Austria for assistance under the European Globalisation Adjustment Fund (EGF). The application will now be sent to the European Parliament and the Council who have to approve the release of the funds. The application – for €5 706 635 – was submitted after 744 employees were made redundant from nine manufacturers of motor vehicles, trailers and semi-trailers located in the Austrian region of Styria.

EU Employment Commissioner Vladimír Špidla said: “ The automotive industry in Europe has seen exports plummet and its workers are experiencing difficulties. I am glad that today's decision will help these workers return to employment by increasing their skills”.

The Austrian application relates to 744 redundancies in nine automotive manufacturers located in the region of Styria. The redundancies are a consequence of the rapid decline in worldwide demand for cars caused by the financial and economic crisis. These redundancies had a great impact at regional level as the automotive cluster in Styria represents 7.5% of employment in the region against only 1.4% for Austria.

The financial assistance from the EGF is targeted at the 400 workers, among these dismissed workers, with the biggest difficulties for re-integration into the labour market. The package of EGF assistance will help the car workers of Styria by offering them employment assistance, screening, short and long term professional orientation, individual coaching, individual qualifications, training and subsistence allowances.

The total estimated cost of the package is almost €8.8 million, of which the European Union has been asked to asked to fund €5.7 million.

Background

There have been 33 applications to the EGF so far, for a total amount of over €157 million, helping more than 40,000 workers. The Styria application is the eighth application concerning the automotive sector. Other applications relate to textiles, construction, electrical equipment, manufacture of machinery and equipment, computers, mobile phones, crystal glass, furniture, domestic appliances, construction, ceramic products, builders' carpentry and aircraft maintenance. Initial reports from the first cases where EGF intervened show strong results to help workers stay in the labour market.

The EGF, an initiative first proposed by President Barroso to provide help for people who lose their jobs due to the impact of globalisation, was established by the European Parliament and the Council at the end of 2006. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument. It forms part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July and applies to all applications received from 1 May 2009 onwards. Styria is one of the first applications approved by the Commission benefiting from the revised rules.