WRITTEN QUESTION E-0881/00 by Harlem Désir (PSE) to the Commission. Redundancy plan in the wake of the ABB-Alstom group merger.
Date: 2000-03-22
Institutions: European Parliament, Provisional data
Subjects: competence of the Member States, energy production, industrial restructuring, infringement of EU law, job cuts, merger

28.12.2000

EN

Official Journal of the European Communities

C 374 E/177

Since 1 January 1999 the Danish State has purchased public transport services from the DSB under a
contract according to which the State pays a gross subsidy of DKR 2,9 billion. When the Inland Revenue
Department decided in 1999 that VAT should be charged on the Great Belt Bridge tolls, the subsidy paid
to the DSB was increased on the grounds that:

as the DSB had to pay VAT on permanent railway charges in 1999, the DSB net subsidy would be
increased by DKR 192,5 million.

In other words, the DSB is paying VAT on the bridge tolls, but having it refunded via the State contract.
The private bus company does not receive any kind of public subsidy and pays VAT which is not
refunded.

Does the Commission consider this form of VAT refund to the DSB as compatible with the Community(cid:146)s
rules on competition and State subsidies?

Answer given by Mrs de Palacio on behalf of the Commission

(25 April 2000)

The Commission would inform the Honourable Member that
it has already received information
concerning the issue she raises and is currently examining the arrangement in question. The Commission
has therefore asked the Danish authorities to provide the Commission with all relevant information, in
order to allow it to make an assessment of the arrangement under applicable state aid rules.

(2000/C 374 E/209)

WRITTEN QUESTION E-0881/00

by Harlem DØsir (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(cid:146)s largest energy producer (cid:129) 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(cid:146)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.

C 374 E/178

Official Journal of the European Communities

EN

28.12.2000

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 (cid:129) 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 infringe-
ments of these provisions were brought to its attention.

More generally, the Commission fully agrees with the Honourable Member that the expected social impact
information to and consultation of workers(cid:146)
of any managerial decision must be the subject of
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.

(2000/C 374 E/210)

WRITTEN QUESTION E-0883/00

by Glyn Ford (PSE) to the Commission

(22 March 2000)

Subject: Relocation of Commercial Hydraulics from England to Germany

Ultra Hydraulic Ltd. (a division of Commercial Hydraulics) has recently announced plans to close down its
operation in Cheltenham, Gloucestershire, UK to relocate to Germany. This announcement was made
without prior notification to the trade unions, and the move itself will result in the loss of 252 jobs at the
Cheltenham site.

Has the European Commission allocated funds to Commercial Hydraulics for this move, and has it also
checked to find out whether the German Government has allocated funds to the company for this move
and, if so, whether it complied with European Union legislation on State Aids? Does the Commission feel
this lack of consultation about the move corresponds to the spirit or letter of the law on worker
consultation?