EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 30.11.2009 
SEC(2009)1619 final 
  
COMMUNICATION TO THE COMMISSION 
on application EGF/2009/013 DE/Karm ann received from Germany for 
a financial contribution fr om the European Globalisation Adjustment Fund 
 
EN 2   EN COMMUNICATION TO THE COMMISSION 
on application EGF/2009/013 DE/Ka rmann received from Germany  for 
a financial contribution fr om the European Globalisation Adjustment Fund 
Germany  submitted application EGF/2009/013 DE/Karma nn for a financial contribution from 
the European Globalisation Adjustment Fund (hereinafter  "EGF"), following the redundancies 
in the enterprise Karmann.  
1. The application was presented to  the Commission on 13 August 2009 and 
supplemented by additional information up to 23 October 2009. 
2. The application meets the conditions for deploying the EGF as set out in Article 2(a) 
of Regulation (EC) No 1927/ 2006 of the European Parliame nt and of the Council of 
20 December 2006 on establishing the European Globalisation Adjustment Fund1 
and was submitted within the deadline of 10 weeks referred to in Article 5 of that Regulation. 
SUMMARY OF THE APPLICATION AND ANALYSIS 
(a) Analysis of the link between the redundancies and st ructural changes in world 
trade patterns:  
3. The application relates to 2 476 redundancie s in different parts of the Karmann 
group, of which 1 618 occurred during the re ference period , 803 before the reference 
period and 55 after the reference period 
In order to establish the link between the redundancies and structural changes in 
world trade patterns, Germany argues that the automotive manufac turing industry in 
the EU has been seriously impacted by a cha nge in world trade patterns, in particular 
a significant reduction of the EU ma rket share. The application cites2 a reduction in 
EU market share (in terms of the numb ers of cars produced) from 32,1 % in 2000 to 
25,8 % in 2008, to the advantage of the BRI C countries (Brazil, Russia, India and 
China), the market share of which incr eased from 8,9 % in 2000 to 21,2 % in 2008.  
4. The German authorities further argue that the impact of the structural changes in 
world trade has been exacerbated by the gl obal financial and economic crisis and the 
ensuing reduction in demand for motor vehicles since the second half of 2008. 
5. In conclusion, it is the opinion of th e Commission services that the 2 476 
redundancies in Karmann can be linked, as required by Articles 1 and 2 of 
Regulation (EC) No 1927/2006, to  structural changes in world trade patterns, which 
have led to a significant reduction of the EU market share in the production of motor 
cars. 
                                                 
1 OJ L 48 of 22.2.2008, p. 82 
2 Price Waterhouse Coopers Automo tive Institute, AUTOFACTS Q2/2009 
 
EN 3   EN (b) Demonstration of the number of redundancies :  
6. Germany submitted this application under the in tervention criteria of Article 2(a) of 
Regulation (EC) No 1927/2006, which requi res at least 500 redundancies over a 
four-month period in an enterprise in a Member State, including workers made 
redundant in its suppliers or downstream pr oducers. The applicati on cites a total of 
1 618 redundancies during the pe riod of reference (from 1 July 2009 to 31 July 2009) 
in Karmann. These redundancies were calculated in accordance with the provisions of the 2
nd indent of paragraph 2 of Arti cle 2 of Regulation (EC) No 1927/2006. 
7. It is the opinion of the Commission services  that the total number of job losses in 
Karmann during the reference period is sufficient to comply with the criteria of 
Article 2(a) of Regulation (EC) No 1927/2006. 
(c) Explanation of the unfores een nature of those redundancies:  
8. The German authorities argue that th e redundancies were unforeseen for the 
following reasons. Firstly, there has been a recent change in manufacturing strategy 
of the big car manufacturers, who now seek  to reintegrate th e production of small 
series into their own production lines, whereas these series  were previously 
outsourced to manufacturers such as Karman n, specialised in small series of so-
called 'niche car'3 models. Secondly, the dissociati on between Chrysler and Daimler 
in 2007 caused the phase-out of the production of  the Chrysler Crossfire, earlier than 
planned. Thirdly, the failure in 2008 to fi nd a new investor in Karmann, despite 
intensive and promising negot iations with potential investors, forced Karmann to 
take more drastic measures. Finally, the fi nancial and economic crisis impacted also 
the profitable parts of the enterprise, su ch as the tool-making activities and the 
manufacturing of roof sy stems for cabriolet cars. 
(d) Identification of the dismissing enterp rises, suppliers or downstream producers, 
sectors, and the categories of workers to be targeted:  
9. The application concerns 2 476 redundancie s in two companies of Karmann. 1 618 
redundancies occurred in W ilhelm Karman GmbH, with  registered office in 
Osnabrück and 858 redundancies in Karmann-Rheine GmbH & Co.KG with registered office in Rheine. Of these 2 476 redundancies 1 618 occurred during the reference period, 803 before the reference pe riod and a further 55 after the reference 
period. Of these 2 476 redundant workers 1 793 are targeted for assistance.  
10. Of the 1 793 workers targeted for assist ance 92,4 % are male and 7,6 % female. 96 % 
are EU citizens and 4 % are non-EU citizens. 80,0 % belong to the 25 to 54 years age 
group, 19,5 % are between 55 and 64 years of age and 0,5 % belong to the 15 to 24 
years age group. 0f the 1 793 workers targeted for assistance 12,2 % have a long standing health problem or disability . In terms of professional categories
4, 61,5 % are 
'craft and related trades workers', 18,6 % belong to the category 'elementary 
occupations', 8,6 % are 'plant and machin e operators and assemblers', 6,9 % are 
'clerks, 2,1 % belong to the category 't echnicians and associated non-technical 
                                                 
3 Karmann produced inter alia the A4 Cabriolet for Audi, the Crossfire for Chrysler, the SLK for 
Mercedes. 
4 Categories based on the International Standard Classification of Occupations, 1 digit, (ISCO-88) 
 
EN 4   EN professions', 1,1 % are 'service workers and shop and market sales workers', 0,6 % 
belong to the category 'professionals' and another 0,6 % are 'skilled agricultural and 
fishery workers'. 
(e) Description of the territory concerne d and its authorities and stakeholders:  
11. The territories concerned by the redundanc ies are the cities of Osnabrück and 
Rheine, were the companies are located. At  NUTS II level, the re gions concerned are 
Weser-Ems and Münster. 
The main responsible aut horities are the Osnabrück, Nordhorn and Rheine Labour 
offices, the central office of the Federal Employment Office, th e regional directorate 
of the Federal Employment office in North Rhine Westphalia and Niedersachsen-Bremen, the Ministry for Labour, Health  and Social Affairs of North Rhine 
Westphalia and the Ministry for Economy, Labour and Transport of Niedersachsen. 
Other stakeholders are the administrati ve office of IG Metall in Rheine and 
Osnabrück, the insolvency administrator Ottmar Hermann and the transfer company Schaffer Success Projekt Rheine/Osnabrück GmbH & Co. KG. 
(f) Expected impact of the redundancies as regards local, regional or national 
employment:  
12. The applicant states that the redundant work ers fall within the responsibility of three 
local employment offices: Osnabrück and No rdhorn in Niedersach sen and Rheine in 
North Rhine Westphalia. The German author ities argue that although in these three 
areas the unemployment rate is currently be low the German average, the number of 
unemployed persons has increased above th e German average (an average increase 
between June 2008 and June 2009 of 8 % fo r Germany, against an increase of 18,2 % 
in Rheine, 19,4 % in Osnabrück and 27,3 % in  Nordhorn. It is expected that the 
workers made redundant by Karmann will lead to a further 6,5 % increase in the number of unemployed in the areas manage d by the three local employment offices. 
Moreover, the number of job vacancies has decreased significantly  as a consequence 
of the financial and economic crisis. Be tween June 2008 and June 2009 the number 
of job vacancies decreased by 36,5 % in Osnabrück and by 67,1 % in Rheine. 
13. In conclusion, in these circumstances, the redundancies can be seen to have a 
significantly negative effect on the local and re gional economy. 
(g) Co-ordinated pack age of personalised se rvices to be funded and a breakdown of 
its estimated costs, including its comp lementarity with act ions funded by the 
Structural Funds:  
14. The following types of measures are proposed, all of which combine to form a co-
ordinated package of personalised services aimed at re-integrating the workers into 
the labour market.  
– Short-time allowance : This is intended to secure the livelihoods of workers who 
opt to enter into the transfer company5. For the purposes of the EGF application, 
                                                 
5 As already explained in SEC(2007)1142 on application EGF/2007/003 DE/BenQ a transfer company is 
an instrument provided for under German law which can be put in place in case of restructuring with 
 
EN 5   EN the short-time allowance can only be included for periods within which the 
dismissed workers are actively particip ating in active labour market policy 
measures that are provided within th e framework of the transfer company. 
– Basic qualification : This measure aims to improve the employability of migrant 
and low-skilled workers. It includes a Ge rman-language course targeting workers 
with a migrant background and a vocational training followed by six weeks' work experience placement in the areas of  metal or storage/logistics. 
– Group qualifications
: These target workers with a basic vocational knowledge, 
and provides them with up-to-date know- how and specific technical knowledge 
that would enhance their chances of re-i ntegration into the labour market. These 
include, for example, cutting techniques, driving licenses, quality management, machine operations, forklift driving licence. 
– Specific individual qualifications
: These make it possible to develop individual 
competences and skills, which are nece ssary to acquire some specific jobs. 
– Management of qualifications : This covers the identification and electronic 
registration of the qualification needs of all workers targeted for assistance, the 
creation of a database with the supply fr om regional training providers, as well as 
the interconnection of both databases in order to determine tailor-made 
qualifications. 
– Workshops/peer groups : This aims to offer special coaching in small groups in 
order to enhance the empowerment of the dismissed workers. Besides participation in the activities in work shops, dismissed workers with a specific 
vocational background will also be given th e opportunity to visit job fairs where 
they can directly contact potential employers . It is also planned to organise sector 
or theme specific fairs within the transfer company. 
– Counselling for business start-up
: Besides the classical courses for those wishing 
to set up businesses, the measure also provides for an eight-week intensive seminar and a coach to guide the participants during the whole process of setting up a business. 
– Support for international job applications
: This measure aims firstly to offer the 
possibility to a limited number of workers of preparing to apply for jobs abroad in 
co-operation with Eures, including language preparation and cross- border visits to 
enterprises in a neighbouring country. A second target group for this measure 
consists of workers with a migrant backgr ound who wish to return  to their country 
of origin and set up a busine ss there; this invol ves in-depth advice on the relevant 
situation pertaining in their country. 
– Placement research : Placement researchers interface with potential employers and 
identify on the basis of specific job v acancies the most suitable candidates and 
possible further job specific training needs. 
                                                                                                                                                         
ensuing job losses. The transfer company makes it po ssible to prepare in a st ructured manner redundant 
workers for a new job through coaching, qualification and placement activities. 
 
EN 6   EN – Mentoring and support, in particular  aftercare in case of unemployment : This 
measure provides support for workers w ho do not find a new job upon termination 
of the transfer company. In order to ensure continuity in placement activities, they will retain the same mentoring netw ork as in the transfer company. 
15. The administrative expenditure, which is in cluded in the application, in accordance 
with Article 3 of Regulation (EC) No 1927/2006, covers preparatory activities, 
management, information and publicity and control activities. 
16. The personalised services that are part of  the co-ordinated package presented by the 
German authorities are active labour market measures falling within the eligible actions as defined in Ar ticle 3 of Regulation (EC) No 1927/2006. The German 
authorities estimate the total costs of these services at EUR 9 137 449 and the 
administrative expenditure at EUR 400 000 (=  4,2 % of the total amount). The total 
contribution requested from the EGF is EUR 6 199 341 (65 % of the total costs).  
Actions Estimated 
number of 
workers targeted Estimated cost 
per worker 
targeted 
(in EUR) Total costs 
(EGF and 
national 
cofinancing) 
(in EUR) 
Personalised services  (first paragraph of Article 3 of Regulation (EC) No 1927/2006) 
Short-time allowance 
('Transferkurzarbeitergeld') 1 793 2 775 4 975 575
Basic qualification 
('Grundlagenqualifizierung') 214 2 934 627 876
Individual qualification 
('Einzelqualifizierung') 48 3 844 184 512
Group qualification 
('Gruppenqualifizierung') 239 3 905 933 295
Qualification management 
('Qualifizierungsmanagement') 501 651 326 151
Peer groups / workshops 547 558 305 226
Counselling for business start-up 
('Existenzgründerberatung') 42 3 367 141 414
International job applications 
('Internationale Bewerbungen') 300 317 95 100
Placement research ('Stellenresearch') 225 1 022 229 950
Aftercare in case of unemployment 
('Nachbetreuung Erwerbslosigkeit') 1 275 1 034 1 318 350
 
EN 7   EN Sub total personalised services  9 137 449
Technical assistance for implementing EGF  (third paragraph of Artic le 3 of regulation (EC) 
No 1927/2006) 
Sub total technical assistance   400 000
Total estimated costs   9 537 449
EGF contribution (65 % of total costs)   6 199 341
 
17. As regards the complementarity with ac tions funded by the Structural Funds, the 
application distinguishes between the EGF package and the initial package of active 
labour market measures. The initial pack age for Karmann Rheine GmbH & Co. KG 
comprises, besides the creation of a tran sfer company, ESF funding provided by the 
Land North Rhine Westphalia for additiona l placement and counselling activities. 
For Wilhelm Karmann GmbH, ESF funding is  provided by the Land Niedersachsen 
for additional placement and counselling activ ities. In addition, Federal ESF funding 
is made available to provide time-limited, certified qualifications, such as basic qualifications (German language course , basic qualification metal), group 
qualifications and individual qualifications. 
In order to ensure complementarity with other measures at national, regional and 
local level, the EGF package of active la bour market measures has been entirely 
conceived as a complement to the initial package de scribed above.  
The measure concerning international job applications will be carried out in co-
operation with the Eures Centre of the Federal Labour Office. 
(h) Date(s) on which the personalised services to the affected workers were started or 
are planned to start:  
18. Germany started the personalised  services to the affected workers included in the co-
ordinated package proposed for co-financi ng to the EGF, on 1 February 2009. This 
date therefore represents the beginning of the period of eligibility for any assistance 
that might be awarded from the EGF (first  paragraph of Article 11 of Regulation(EC) 
No 1927/2006). 
(i) Procedures for consulting the social partners:  
19. Following the announcements of staff reductions in Karmann the federal Ministry for 
Labour and Social Affairs initiated discus sions on the package of measures and the 
possibility of EGF support with the social partners. Representatives of the Federal 
Employment Office, from the trade union IG Metall and from the regional Ministries 
for Employment also participated in the discussions. A final consultation with all 
parties concerned took place in July 2009 at  the Federal Ministry for Labour and 
Social Affairs, during which common ag reement was reached on the package of 
measures. 
 
EN 8   EN 20. The German authorities confirmed that th e requirements laid down in national and 
Community legislation concerning collectiv e redundancies had been complied with. 
(j) Information on actions that are mandatory  by virtue of nationa l law or pursuant to 
collective agreements  
21. As regards the fulfilment of the criteria set out in Article 6 of Regulation (EC) No 
1927/2006, the German authorities in their application:  
• confirmed that the financial contributi on from the EGF does not replace measures 
which are the responsibility of companies by virtue of national law or collective 
agreements; 
• demonstrated that the actions provide s upport for individual workers and are not 
to be used for restructuring companies or sectors;  
• confirmed that the eligible actions referre d to under points 14 to 16 above do not 
receive assistance from other Community financial instruments.  
22. Management and control systems  
Germany has informed the Commission that  the financial contribution will be 
managed and controlled by the following bodi es inside the Federal Ministry for 
Labour and Social Affairs ('Bundesministeri um für Arbeit and Soziales'): VI Gruppe 
Soziales Europa as managing authority and Referat Zb2 as audit authority. 
CONCLUSION  
23. In conclusion, for the reas ons set out above, it is pr oposed to accept application 
EGF/2009/013 DE/Karmann submitted by Germany  relating to the redundancies in 
Karmann,  as evidence has been provided that these re dundancies result from 
structural changes in worl d trade patterns which have led to a serious economic 
disruption, affecting the re gional or local economy. A co-ordinated package of 
eligible personalised services has been proposed. Therefore, it is proposed to 
mobilise the EGF in response to the German application. 
FINANCING 
The total annual budget available for the EGF is EUR 500 million. So far, five cases have 
been accepted for funding in 2009, and a further six cases have been proposed for funding to the Budgetary Authority, amounti ng to a total of EUR 53 039 047 . 
Article 12 (6) of Regulation (E C) No. 1927/2006 states that on 1 September of each year, at 
least EUR 125 million should remain available in order to cover any needs arising until the 
end of the year. 
After deduction of the amounts already accepted or proposed for commitment, an amount of 
EUR 446 960 953 remains available. 
It is proposed to deploy EUR 6 199 341 from the EGF. 
THE COMMISSION IS THEREFORE INVITED TO: 
 
EN 9   EN – conclude that the cond itions for a financial contributio n from the EGF in response to 
application EGF/2009/013 DE/Karmann submitted by Germany  are met; 
– submit to the budgetary authority a proposal to authorise commitment appropriations 
corresponding to EUR 6 199 341, as  specified in point 16, as well as a request for the 
transfer of this amount in commitment ap propriations to budget line 04.0501 (European 
Globalisation Adjustment Fund) in accordance w ith Article 12 (3) of Regulation (EC) No 
1927/2006; 
– authorise the transfer of the identical am ount in payment appropriations from budget line 
04.0217 (European Social Fund (ESF) – conve rgence) to budget line 04.0501 (European 
Globalisation Adjustment Fund).