“The global financial crisis has changed the conditions and expectations for the future of shipbuilding. We now anticipate that this industry will move to low cost areas, mainly in Asia, whose market share has been growing spectacularly in the years leading up to the crisis” said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. He added: “It is unlikely that the companies concerned by this application could potentially return to normal production at the end of the crisis. The Globalisation Fund can help cushion this dramatic change, preparing workers for new job opportunities.”

The Danish application relates to 1,122 redundancies in 45 enterprises mostly involved in producing machinery and equipment for the shipbuilding sector and located in Nordjylland, in the north of Denmark. The fall in demand from shipbuilders is at the origin of the dismissals. The shipbuilding sector has seen demand plummet due to a combination of factors, including the financial and economic crisis, which brought about reduced shipbuilding requirements. By the end of 2008 / beginning of 2009, the placement of new orders had come to an almost complete halt and several of the ships on order had their delivery dates postponed.

The Nordjylland region with almost 600 000 inhabitants is the smallest region in Denmark and also has the lowest population density. In terms of employment levels and income, it is lagging behind the rest of Denmark. The region is particularly dependent upon the industrial sector, and has been hard hit by the current crisis. The redundancies in the Nordjylland application are all the more serious to the region as it is anticipated that, even after the end of the crisis, the sector will not revive, with most of the new orders going to the far East, where costs are lower.

The package of EGF assistance for the former workers of the machinery and equipment manufacturing industry will help 951 of the most disadvantaged back into employment by offering them promotion of entrepreneurship; courses on location with companies; supplementary general education; and supplementary industrial education in the maritime field, in renewable energy and energy optimising. The total estimated cost of the package is almost €11.5 million, of which the European Union has been asked to provide EGF assistance of €7.5 million.

Background

There have been 66 applications to the EGF since the start of its operations in January 2007, for a total amount of about €373.6 million, helping more than 70,000 workers. EGF applications relate to the following sectors: automotive (France, Spain, Portugal, Austria, Germany, Sweden); textiles (Italy, Malta, Lithuania, Portugal, Spain and Belgium); mobile phones (Finland and Germany); domestic appliances (Italy); computers and electronic products (Ireland, Portugal and the Netherlands); mechanical/electronic (Denmark); repair and maintenance of aircraft and spacecraft (Ireland); crystal glass (Ireland); ceramics and natural stone (Spain); construction (Netherlands, Ireland and Lithuania); carpentry and joinery (Spain); electrical equipment (Lithuania) publishing and printing industry (Netherlands and Germany), furniture (Lithuania), retail trade (Czech Republic and Spain) and wholesale trade (Netherlands). Final reports from the earlier cases supported by the EGF show strong results in helping workers stay in the labour market and find new jobs.

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 2009 and applies to all applications received from 1 May 2009 onwards.