WRITTEN QUESTION E-0881/00

by Harlem Désir (PSE) to the Commission

(22 March 2000)

Subject: Redundancy plan in the wake of the ABB-Alstom group merger

In November 1999 the Commission authorised the merger of the ABB and Alstom groups, which created the world's largest energy producer ABB-Alstom Power. Today, as feared by the employees, the group has announced that it is to shed 10 000 jobs, including 5 460 in Europe, primarily in France and Germany.

The Commission bears great responsibility for this. When it authorised the ABB-Alstom merger, it had a duty to take all necessary steps to safeguard jobs and to monitor compliance with Directive 94/45/EC(1) on informing and consulting workers in undertakings and in Community-scale groups of undertakings. In its resolution of 17 February 2000, Parliament reminded the Commission of this requirement, but it was completely disregarded and the group totally failed to comply with the obligation to inform workers in the event of restructuring.

Did the group's senior executives inform the Commission of their redundancy plan when they applied for authorisation to merge and, if so, why did the Commission approve such a plan? If they concealed the plan, which had undoubtedly already been drawn up in November 1999, does the Commission not have the right to take action against the group for having misrepresented the implications of the merger for the workforce?

Whatever the case, what measures does the Commission intend to take in response to this breach of Community law and to persuade the group to shelve its plan?

(1) OJ L 254, 30.9.1994, p. 64.

Answer given by Mrs Diamantopoulou on behalf of the Commission

(11 May 2000)

The Commission authorised the merger in question under the powers conferred upon it by the EC Treaty and in accordance with the Community legal provisions in force. In exercising these specific powers the Commission restricted itself to competition law issues, as required by the relevant provisions.

The Merger Regulation is partly based on the provisions of the EC Treaty which recognise that distortions of competition may prevent Community citizens from sharing the benefits of the common European market in goods and services. In other words, the EC Treaty considers that competitive markets in which buyers and sellers can act openly and freely are likely to provide the best results for citizens throughout the Community in terms of price, efficiency, customer choice, product quality, employment and in other respects. Consequently, the criterion which the Commission must apply to mergers focuses on their anticipated effect on competition. The Commission carefully examined the impact of the ABB-Alstom merger on the structure of competition in the relevant markets within the European Economic Area (EEA) and conducted a survey to obtain the reactions of competitors, customers and suppliers. Its conclusion was that there was no risk of serious competition problems, as a result of which, in accordance with the criteria laid down in the Merger Regulation, it authorised the transaction.

Nevertheless, the Commission, as guardian of the EC Treaty and secondary legislation, is obliged to examine this type of operation from various angles. In particular, using all the means laid down in the EC Treaty, it must also monitor and ensure compliance with other Community legal instruments concerned with this type of operation from other perspectives, such as information and consultation of workers.

As these provisions are imposed by Community directives and national provisions incorporating directives into national law, it is in the first instance the task of the national authorities to assess any possible infringements which are referred to them under the procedures for the protection of the rights referred to in those national provisions.

The Commission also asked the national authorities for clarifications as soon as suggestions of infringements of these provisions were brought to its attention.

More generally, the Commission fully agrees with the Honourable Member that the expected social impact of any managerial decision must be the subject of information to and consultation of workers' representatives at the earliest possible stage, in order to facilitate the search for appropriate solutions from the point of view of safeguarding jobs. This is the objective of recent proposals in this area, which the Commission hopes will rapidly come to fruition.