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Vol.1980/0054

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COMMISSION
OFTHE
EUROPEAN COMMUNITIES
GenerolSecretorio!COM(80)179final
Brussels,22ndAU1980
FOROFFICIAL USEONLY
REQUESTFORASSENT/PURSUANT TOARTICLE56.2aOFTHE
ECSCTREATYTOGRANTING ARECONVERSION LOANTO
"GENERAL MOTORSLUXEMBOURG OPERATIONS S.A.(LUXEMBOURG)"
(Communication fromtheCommission totheCouncil)
COM(80)179final

COMMISSION
OFTHE
EUROPEAN COMMUNITIES
INTERNAL DOCUMENT
COMMUNICATION TOTHECOUNCIL
Subject:.Requestforassent,pursuanttoArticle56.2aoftheECSCTreaty
tograntingareconversion LoantoGeneralMotorsLuxembourg
Operations S.A.(Luxembourg).;
I.ESSENTIAL INFORMATION
\*Applicant
Beneficiary
Project
Location
Investment
Loanrequested
Jobscreated
InterestreductionGeneralMotorsLuxembourg Operations S.A.
GeneralMotorsLuxembourg Operations S.A.
Newspecial'toolingplant:-
Bascharage,Luxembourg
475MFlux.,(+11/87MEUA)
235MFlux.<+5,85MEUA)
450
j3pointsperyearinthefirstfiveyears
on5MEUA *'
II.CONFORMITY WITHARTICLE56OFTHE'ECSCTREATY
TheLuxembourgironandsteelindustry,whichisstillaveryimportantsector
intheeconomyofLuxembourg,hasbeenfacingsevereproblemsforalmostfive
years.Thetwoironandsteelenterprises,ARBEDandMMRAhavebeenworkingon
restructuring andrationalisation,' whichhasresultedinacutbackintheworkforce .
Thistrend"isexpectedtocontinueinthenextyears.
TheprojectforwhichaloanissoughtislocatedatBascharage sometenmiles
southwestofthecityofLuxembourg .Bascharageisinthecentreoftheproblem
areaofthedecliningironandsteelindustry.Newplantscreatingnewjobs
mightimprovethelabour •marketsituation.Thisprojectcreates4-50newjobs.
TheintegratedsteelplantatRodange(MMRA)whichhad2,700jobsinDecember
1978,willhaveonly1,300maximumin1981aftertherestructuring oftheplant.
TheevolutionoftheemploymentsituationatMMRA,whichislocatedatsome
threemilesdistancefromBascharage,isasfollows:
Pic:.'i*;ionaiaddress:RuedelaLoi200,B-1040Brussels-Téléphoné350040-358040-Télégraphieaddress:.COMEURBrussels»-
Telex:-COMEURBRU 21877.

Development ofPersonnel
HourlyPaid
Production PAC Total
31.12.1978 1567 551 2118
30.4.1979 1536 533 2069
31.10.1979 1231 782 2013
£'
%Salaried Staff
Production PAC Total
31.12,1978 434 138 572
30.4.1979 411 112 523
31.10,1979 352 148 500
Total
Production PAC Total
31.12.1978 2001 689 2690
30.4.1979 1947 645 2592
31.10.1979 1583 930 2513
1981 1300 •
Atprésent (31.10.1979 )some1,000exECSCemployées areredundant (PAC=
anticrisisdepartment ).
Therestructuring oftheironandsteelindustryinLuxembourg willresult
inafinallossof9,500jobsovertheperiod1975-'1983.Calculated as
apercentage overthetotalactivepopulation inindustry,thisfigureis
oneofthehighestinEurope.Theironandsteelindustryitselfwilllose
36.5%ofitsjobopportunities overthisperiod.
Thecreationof450new-jobs(250forexECSCworkers)atthreemiles
distance fromMMRAshoulcl"b'ring somerelieftothelabourmarketsituation .

III.THEUNDERTAKING
GeneralMotorsLuxembourg Operations S.A.whichisapplyingforthis
loan,isanewsubsidiaryofGeneralMotorsDetroit,U.S.A.andis
established underLuxembourg law.ThetotalsharecapitalisFlux..
300Mofwhich50%hasbeenpaidin.
Thenewsubsidiary replaces "GeneralMotorsLuxembourg S.A.whichhad
beeninvolvedintheproductionofcivilengineering equipment,but
ceasedbecauseoflackofprofitability .Theexistingworkforce .of
about35hasbeentakenoverbyGeneralMotorsLuxembourg Operations S.A
Thenewsubsidiaryisa"specialtooling"plant.Specialtoolingcould
bedefinedasbeingpermanentmanufacturing aidssuchasdies,jigs,
fixtures,moulds(plasticandrubber),patterns ,andgaugesacquiredfor
theproductionofnewproductsormodelswhoseutilitygenerallyceases
withthediscontinuity ormodification ofsuchproductsormodels.
Basically ajigandfixturearenotdirectlyusedoncars,butareaids
totheproductionofindividual pieces,sub-assemblies ,etc.
Theproducedspecial'toolingwi11onlybeusedbyotherGeneralMotors
subsidiaries intheassemblyprocessesofcars.Thereisno"market"
ofspecialtooling.Theproductswhicharemanufactured atBascharage
willbeentirelysoldtoassemblyplantsof,GeneralMotorsinEurope.
The-actualinvestment .infixedassetsamountingtoFlux.475willstart
inNovember1979andwillbecompleted byOctober1980.Annualsales
areprojectedtoreachmorethanFlux.500Mwhentheplantwilloperate
atitsfullcapacityin1981.
IV.SOCIALCONSIDERATIONS
The450newjobswillbedividedbetween400.hourlypaidworkersand
50salariedemployees.■
DivisionofLabourforHourlyPaidWorkers
Toolmakers . .225
Turners,latheoperators,boringmilloperators 83
Fitters 12
Welders 9
Electricians 26
Unskilled 45

-L-
Therecruitment willstartinthefirstmonthsof1980andwillbecompleted
by1981whentheplantisatfullemployment andproduction .Becauseofthe
fairlydifficult jobrequirements itisenvisaged thathourlyworkerswill
requireveryextensive training .Approximately 50workerswillundergotraining
atOpel,Germany,forsixmonths.TheotherswillbetrainedatBascharage
withassistance fromtheaffiliated company.Itisplannedtohavesmallwork
crewswithverycloseandimmediate supervision .Itisanticipated thatitwill
takesixtoninemonthsuntilaworkerwillbefullytrained.
ThewagespaidatBascharage willbecompetitive .
TheGeneralMotorscompanyhas.closecontactwiththe"divisionanticrise".
Theredundant steelworkersinthismanpower poolwillgetfullguidance and
adviceiftheyareinterested intakingopajobprovidedatthenewGeneral
Motorsplant.
V„ENVIRONMENTAL ASPECTS
»
Thecompanydoesnotforeseeoranticipate anyenvironmental problems.
VI.FINANCING
Thefinancerequiredwillbe:
Millions Flux.
Land,buildings,equipment ,475
Workingcapital 75
555
t
Thesourcesoffinanceenvisaged are:
Millions .Flux.
Paidincapital •' . 150
Stateaid 71
ECSCloan - .235
Bankloans 99
555
VII.CONCLUSION
TheCommission considers thattherequestcomplies withArticle56.2(a)ofthe
ECSCTreatyandthattherproposed investment is.economically sound.In
consequence ,theCommission hasapproved aloantoGeneralMotorsLuxembourg
Operations S.A.foritsprojectatBascharage ,Luxembourg ,foramaximum amount
ofFlux.235M(+5.85MEUA)oritsequivalent amount.Interestistobe
reduced by150,000 EUAperyearforthefirstfiveyearsafterthepaymentor
payments oftheloan.
TheCommission invitestheCounciltogiveitsassenttotheforegoing decision .