WRITTEN QUESTION P-1099/98 by Fiorella Ghilardotti (PSE) to the Commission (30 March 1998)

Subject: Black & Decker restructuring programme - Right of workers to be informed and consulted

In January 1998 the Black & Decker Corporation announced record last-quarter and year-end results for 1997. Turnover had increased by 8% on the last quarter of 1996 and hence by 4% (not counting exchange effects) for the whole year compared with the preceding tax year.

At the same time, however, in spite of this performance, the multinational announced that it was to implement a two-year restructuring programme aimed at substantially reducing its structural costs. The programme entails the closure of several factories and the loss of some 3 000 jobs, equivalent to 10% of the total labour force. In addition, the company has indicated that income from disinvestment will be used under a special programme to buy back ordinary shares (up to 10% of those currently being traded). Owing to the restructuring programme, the Molteno factory (in Lecco, Lombardy, Italy) will be shut down, and 670 jobs will consequently be lost, plus those of 700 workers supplying components and ancillary services. The factory plant, however, is new and highly efficient.

The company decision seems clearly to have been prompted more by financial than industrial policy considerations and is thus detrimental to productive investment, spatial development, and employment.

1. Does the Commission have any indication whether European legislation is being properly observed or infringed? In particular, what is the position as regards the Directive on works councils and the related obligation to consult and inform employees when their interests are at stake?

2. How will the Commission ensure that the Group of Experts recently set up following the Luxembourg extraordinary Council meeting will address itself to this and other textbook examples demonstrating the evils of globalisation?

3. Does the Commission not believe that, together with international partners, especially the United States, it should consider whether it might lay down a frame of reference to foster a competitive industrial policy, favouring investment in research, development, and employment, and discouraging financial dealings amounting to pure speculation, as has been repeatedly called for by the EP?

Answer given by Mr Flynn on behalf of the Commission (14 May 1998)

A loss of 670 jobs as described would be covered by Directive 75/129/EEC ((OJ No L 48, 22.2.1975. )) on collective redundancies. Involving as it does a multinational company, this case may also be covered by the European Works Council Directive (94/45/EC) ((OJ No L 254, 30.9.1994. )). In both situations, specific procedures for informing and consulting employees on the closure and its social consequences must be followed.

However, the responsibility for monitoring individual cases such as that raised by the Honourable Member, and ensuring the correct implementation and the respect of this legislation lies, in the first instance, with the national authorities.

The case mentioned by the Honourable Member is precisely the kind of situation which the high level group on corporate restructuring is addressing. Its interim report is expected to be discussed during the next European Council on 15 June 1998.

The final report will be sent to the European Council in December 1998.