Opinion of the European Economic and Social Committee on "Industrial change: current situation and prospects — An overall approach"
Date: 2003-09-25
Institutions: European Economic and Social Committee
Subjects: EU industrial policy, industrial restructuring

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Reason

Damaging to equal opportunities on the Single Market.

Result of the vote

For: 23, against: 58, abstentions: 4.

Opinion of the European Economic and Social Committee on ‘Industrial change: current situation
and prospects — An overall approach’

(2004/C 10/21)

On 22-23 January 2003, the European Economic and Social Committee decided, under Rule 29(2) of its
Rules of Procedure, to draw up an Opinion on Industrial change: current situation and prospects — An
overall approach.

The Consultative Commission on Industrial Change (CCIC), which was responsible for drawing up the
Committee’s work on the subject, adopted its opinion on 1 September 2003. The rapporteur was Mr Van
Iersel and the co-rapporteur was Mr Varea Nieto.

At its 402nd plenary session (meeting of 25 September 2003), the European Economic and Social
Committee adopted the following opinion by 53 votes in favour and one vote against.

1.

Introduction and objective

1.1.
As the expiry date of the ECSC Treaty approached, the
Member States asked the European Commission to present its
ideas on the future of structured dialogue (1). A body within
the EESC was proposed (2) with a remit not limited to the coal
and steel sectors but extended to encompass all aspects relating
to industrial change, particularly in the light of enlargement (3).

The Consultative Commission on Industrial Change was set
up by an EESC Plenary Assembly decision of 24 October
2002. This decision acknowledges the enrichment and added
value the CCIC can bring to the EESC. The CCIC has
24 members from the EESC and 30 external delegates who
have initially been drawn from the former ECSC Consultative
Committee members. Subsequently membership may be
extended in the future to other sectors.

1.2.
The establishment of the Consultative Commission on
Industrial Change opens up new prospects. It will now be
possible to examine questions relating to industrial change in
all their complexity — from an economic and social point of
view as well as in terms of protection of the environment and
sustainable development, with particular emphasis on the
problems encountered by the future Member States.

1.3.
The former ECSC Consultative Committee did a great
deal of useful work for the sectors in question. In the history
of European integration it was a model
for consultation
between the social partners and government and for Com-
munity responsibility for development in these sectors, on the
basis of a specific form of industrial policy. Some of the main
results of this ongoing consultation are listed below:

— Community analysis of markets and market conditions

over the years leading to restructuring processes,

— programmes for regions particularly hard hit by unavoid-

able restructuring,

(1) Industry Council of 18.5.2000.
(2) Communication of 27.9.2000 (COM(2000) 588 final).
(3) Simultaneously with the opinion, the CCIC is drafting an opinion
on: The restructuring of heavy industry in the enlargement
countries.

— Community R&D programmes, (part of financing now
comes from paying back of loans to enterprises and for
housing of workers),

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— Community training programmes,

— (financial) programmes for restructuring in the coal and

steel sectors,

— a large number of opinions on various subjects,

in
particular relating to trade policy and discipline by
government in granting state aid to these sectors,

— other achievements (joint committees for the harmonis-
ation of working conditions, which led later to the setting
up of a committee for social dialogue in the coal sector
and, possibly in the future, also in the steel sector).

— the launch of social programmes (payments in respect of

loss of employment and early retirement).

The sum of all these measures has created a highly competitive
steel industry as well as a profitable export of European mining
technology and know-how.

Flanking measures for conversion and territorial devel-
1.4.
opment have also been judged necessary in the most badly
affected regions. The financial programmes for restructuring
have been financed by structural funds with specific pro-
grammes for affected regions: Rechar I (1990-1993), Rechar II
(1994-1999), Resider I (1988-1993) and Resider II (1994-
1999). These programmes developed social measures and
focused particularly on improving local and regional infra-
structure, which facilitated access to new businesses and
cleaned up areas polluted by coal and steel industries.

1.5. When the ECSC Treaty came to its end, the specific
form of consultation of the ECSC Consultative Committee was
abolished and in its place the CCIC was set up. Past experience
is still valuable. But circumstances for industrial change have
changed. The consultation instruments need to be fine-tuned
in the light of the Lisbon strategy in order to combine
competitiveness with sustainable development and social and
territorial cohesion. In addition to general industrial policy
objectives, these aspects will also require sectoral approaches.

industrial
view, as well as assessing the impact of
change on sectors, firms, workforces, territories and the
environment.

— Seeking positive common approaches to anticipating and
managing industrial change and seeking ways in which
the EU and the Member States can improve firms’
competitiveness and profitability, encouraged by social
dialogue and cooperation between all the parties con-
cerned.

and improving social

— Seeking common approaches to promoting sustainable
development
and territorial
in order to give an impetus to the Lisbon
cohesion,
Strategy, and promoting a framework and conditions
allowing industrial change to take place in a way compat-
ible both with firms’ need for competitiveness and with
economic, social and territorial cohesion.

— Promoting the coordination and coherence of Com-
munity action in relation to the main industrial changes
in the context of enlargement: research, economic, com-
petition, social, regional, environmental, transport, etc.

2.

Industrial change and their driving forces

2.1. Working concept

2.1.1.
Change in the European industrial sector has often
been approached from the restructuring angle. But in fact it is
a much more dynamic concept. On the one hand it embraces
the on-going development of the company (establishment,
development, diversification, change); but, on the other hand,
the business world is closely linked with the European political
and social environment in which it develops, and which in its
turn influences the process of industrial change.

Fundamental
industrial change comes about in two ways:
through radical action and through gradual adaptation. There
is also a second possible distinction: reactive change, imposed
by circumstances, and proactive change, where a decision for
change is taken, although there is no clear or pressing need for
it (1).

1.6.
The goal of this opinion is to highlight the role of CCIC
to further a direct dialogue with all concerned stakeholders
affected by industrial change and where lessons learnt from
both the coal and steel and from other sectors will be used.
This opinion is a first of a series.

Today it is important to dwell on the proactive concept of
change in order better to anticipate and manage the economic,
social, organisational and environmental repercussions of
industrial change.

The EESC considers that future work of the CCIC

1.7.
should be related to the following:

— Analysing industrial change and its causes from the
economic, social, territorial and environmental points of

(1) The causes of change are varied, cf.:

— Prahalad, C.K. and Hamel, G. (1994): ‘Strategy as a field of
study: Why search for a new paradigm?’, Strategic Manage-
ment Journal, vol.. 15 .

— López, J. and Leal, I. (2002): Cómo aprender en la sociedad

del conocimiento, Gestión 2000, Barcelona.

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Restructuring is a constantly recurring phenomenon
2.1.2.
of
the industrial age. The most sweeping changes have
occurred since the 1970s in sectors such as iron and steel,
mining, textiles and shipbuilding. Until recently the economic
and social consequences were dealt with in a specific way.

2.1.3.
Today companies are exposed to rapid change arising
from increasingly open markets, and new markets, the main
features of which are highly developed means of communi-
cation and transport, advanced technologies and their appli-
cations, unremitting and increasingly tough competition,
demanding shareholders and a constant battle for market
positions. That is why, over and beyond the process of
development over time, affecting human, financial and techno-
logical organisation, companies are today making other, more
rapid forms of adaptation. Restructuring has become more
radical, more complex and more extensive in both time and
It
geographical terms, e.g. making use of subcontracting.
affects all
industrial and service sectors and a number of
categories of employees and regions.

The recent use of the term industrial change reflects
2.1.4.
this change in the nature of adaptation by companies (1) and
covers all changes affecting companies, their organisation,
their jobs, skills and locations. These changes also concern the
business environment.

2.2. The context of industrial changes

ment in Asia, particularly in the high technology sector, and
even South America. They also have to cope with unfair
competitive practices which sometimes infringe WTO rules.

At the same time investment and business activity
2.2.1.3.
is being redirected towards countries with low costs (labour,
energy, etc.), direct market access and a high level of edu-
cational and technological skills. Environmental, tax and other
regulations are often less strict there. This transfer of activity
to countries outside the EU sometimes has a negative impact
on employment in the Community and it may seriously affect
certain European regions.

This trend goes generally hand-in-hand with the creation
of
technologically more advanced processes in high-cost
countries, which in many cases is beneficial for the develop-
ment of new areas of activity and for improving employee
skills.

2.2.1.4.
Because of increasing knowledge and technology
innovation, as well as the liberalisation of capital markets,
worldwide investment is no longer restricted to large or
multinational companies. Many medium-sized and even small
companies, particularly firms with high technological added
value, are less and less bound to a particular location or
country. Outsourcing and networking are contributing to
further worldwide diversification of investment and to inter-
national interaction and intertwining.

Industrial change is driven by a series of factors. Some of these,
particularly relevant, are developed below.

2.2.2. T h e E u r o p e a n s i n g l e m a r k e t ,
l a t i o n a n d i m p l e m e n t a t i o n

l e g i s -

2.2.1. G l o b a l i s a t i o n

2.2.1.1.
Notwithstanding the current economic downturn,
industrial change is occurring throughout a world in which
markets continue to become increasingly internationalised
(WTO). There is a clear interaction between international trade
and industrial change.

2.2.1.2.
The world’s main regions are all undergoing the
same development, but differ in the extent to which their
economic and social structures are suited to this process.
Europe’s industries face global competition on productivity.
They meet challenges such as economic and technological
competition from the US (sometimes unfair) (2), rapid develop-

(1) See F. Aggeri & F. Pallez ‘les nouvelles figures de l’État dans les
mutations industrielles’ Cahiers de recherche du centre de gestion
scientifique no 20, École des mines de Paris, 2002 and Bernard
Brunhes consultants ‘la gestion des crises industrielles locales en
Europe’, Cahier no 6, 2000.

(2) For example, the application of Section 201, under which customs
duties on certain flat steels have been increased since March 2002
or the tax law relating to Foreign Sales Corporations, condemned
by the WTO, under which certain firms can benefit from export
subsidies.

In Europe, the completion of the single market
2.2.2.1.
occupies a central place in the process of European integration
and, as an integral part of the process of globalisation, it
promotes a high degree of integration of European economies
and companies.

Economic integration is reflected not only in trade but also in
the development of mergers and acquisitions, some of them
with a Community dimension (3). The long-term trend is
towards a marked increase.

2.2.2.2.
The late 1990s were years of buoyant economic
growth. The combination of economic growth and EMU
strengthened European businesses. But there were still short-
comings in the economic and social dynamics and in know-
ledge development in Europe. That is why, at Lisbon in March
2000, the European Council adopted a new strategic objective
of making the European Union by 2010 ‘the most competitive
and dynamic knowledge-based economy in the world, capable

(3) In 1991 there were 8 239 mergers and acquisitions involving EU
companies. The corresponding number in 1999 was 12 796.
Source:
(European Economy. Sup-
plement A. Economic trends. No 5/6.2000. Office for Official
Publications of the EC).

‘Mergers and acquisitions’

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of sustainable economic growth with more and better jobs and
greater social cohesion’. The aim is the most competitive
economy embedded in a more stable economic framework.

Partly as a consequence of the crisis in the ICT and
2.2.2.3.
telecommunications sectors and substantial
falls in inter-
national stock markets, Europe now faces low growth, wide-
spread economic uncertainty and lack of confidence among
companies and consumers, slower investment and job losses
in different economic sectors.

The European Commission and the European
2.2.2.4.
Council have decided to continue efforts to create a climate in
favour of industrial change in all its aspects. More specifically,
the intentions of the Lisbon Strategy were worked out at the
Summits of Göteborg and Barcelona. In 2003, the Spring
Summit in Brussels resulted in a focus on four priority areas,
which are all closely connected to industrial change:

— innovation and entrepreneurship;

— establishment of an Employment Task Force;

— strengthening the internal market: the Council on Com-

petitiveness has been confirmed;

— environmental protection for growth and jobs.

2.2.2.5.
In its extensive conclusions, the Council stressed
once again the need for realisation of the EU vision of a
knowledge-based society and for ‘boosting competitiveness
back onto the centre stage’. The Council formulated objectives
such as the rapid implementation of the Action Plan ‘simplify-
ing and improving the regulatory environment’, a comprehen-
sive impact assessment for all major proposed EU legislation
in the economic and social fields, inter alia by a systematic
consultation of the social partners.

2.2.2.6.
The European Council also mentions in its con-
clusions specific sectors such as the electricity and gas direc-
tives, the transport sector, the Financial Services Action Plan,
R&D and defence procurement, the European space policy,
information society and biotechnology. Special attention is
their quality and
asked for services of general
accessibility, taking into account the EU rules on government
subsidies and on competition (1).

interests,

(1) The European Commission has just published a Green Paper on
Services of general interest (COM(2003) 270 final, 21.5.2003).

In line with the conclusions of the Summit, the
2.2.2.7.
European Commission presented on 7 May 2003 a Ten-Point
Plan for making Europe better off, emphasising implemen-
tation of legislation among other things. The EESC regrets that,
whilst the European Council develops ever more EU-level
policies, until recently too little attention was paid to their
practical
in
view of industrial change. It is above all important in view of
the European rule of law.

Implementation is important

implementation.

In this ten-point plan, the Commission rightly
2.2.2.8.
pleads for new consensus and determination, for it looks as if
much of the potential of the internal market is being wasted
as the number of infringements is increasing. The target is to
reduce the number of internal infringements by at least 50 %
by 2006 (2).

2.2.2.9.
Sectoral approaches were also put forward by
Commissioner Liikanen, when he stated on 29 January that
‘[...] while the horizontal dimension will remain of fundamental
importance, the effects on industrial sectors, especially those
facing special challenges, must be carefully monitored, and
where possible,
the necessary adaptations made to meet
specific situations’.

2.2.2.10.
The EESC supports the approach set out in the
Commission’s Communication on Industrial policy in an
enlarged Europe but is also of the opinion that emphasis
should also be placed on the need for sectoral policies, which
may be especially useful in connection with economic change
in the candidate countries. Account should be taken of the
lack of such dialogue in these countries at present.

2.2.2.11.
Direct state intervention in industry has been
reduced although state aid needs to be reduced further. A
reduction in state aid promotes a European level playing field
in the sectors concerned.

(2) The number of open infringement cases has soared from just
under 700 in 1992 to nearly 1 600 today. In the ten point plan,
special emphasis is laid on integrating service markets and
‘network industries’ such as energy,
telecommuni-
cations and postal services, which are ‘crucial to all EU citizens’
and a significant part of business costs. Other important elements
of the ten-point plan are the implementation of a Better Regulation
Action Plan and more open public procurement markets.

transport,

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The European business climate and that of the
2.2.2.12.
Member States is directly influenced: by macroeconomic,
monetary and taxation policies. The successful advent of the
euro has not yet led to sufficient uniformity of the economic
policies of the Member States. Substantial differences between
tax regimes persist. To a certain extent these differences in the
macro-economic field between the Member States may also
negatively affect industrial change in Europe.

2.2.2.13.
The development of the single market suffers
from the fact that in vital areas progress has been slow or even
non-existent. Various examples of this are the unsatisfactory
operation of the European capital market, shortcomings in the
competition regime, the absence of a directive on takeovers,
the very long drawn-out negotiations on the European patent,
which were in the end only partially successful, and sometimes
the lack of effective implementation of European legislation.

2.2.2.14.
In order to create further conditions for industrial
change based on social cohesion and competitiveness, the
EESC also reiterates its demands for efficient policies to
achieve:

— human resources development,

— more and better jobs within an inclusive labour market,

— specific attention towards the ageing of the active popu-
lation, and towards measures promoting women’s access
to the labour market,

which all require lifelong-learning at all levels, and improve-
ment of education and training. Analyses of best practice in
each of these subjects are highly desirable.

2.2.2.15.
Innovation policy is a central theme in the Lisbon
strategy. But the financial intensity differs from one country to
another. Moreover, in a number of Member States cooperation
between universities/knowledge centres and business is cer-
tainly not optimal, as pointed out in the conclusions of the
Summit of March 2003. In this area, for instance, Europe
compares unfavourably with the USA. Consequently the
sectoral trade balance between the EU and the USA is in favour
of the latter.

2.2.2.16.
Sustainable development is a principle to which
the EESC subscribes. It has drawn up several opinions, which
should be taken into account within the process of industrial
change.

3.

Industrial and social changes

3.1.
In the last few years a number of well-known reports
have appeared in the EU about fundamental changes in the
business world and the business environment (1).

The European Parliament, the ETUC and UNICE have also
adopted resolutions on industrial change (2).

Change has always been a feature of the business cycle.
3.2.
In the last few decades, it has led to major social and economic
consequences. At the moment, figures show a large increase in
the proportion of the active population working in the services
sector, which is partly due to outsourcing and subcontracting,
partly also to the emergence of dynamic sectors such as
entertainment and media.

3.3.
Technological progress means that products and ser-
vices have an ever-shorter life. Open markets prevail. As a
result, adaptation is needed. Many companies, including those
which have suffered from a crisis, or seen a need to restructure,
undergo a partial or complete transformation. An appropriate
balance needs to be struck between flexibility (adaptability and
new skills) and job stability, by means of social dialogue.
Analyses of concrete cases show that there are several causes
for the need to restructure: capacity adjustments, economic
transition, competitiveness, productivity adjustments, redefi-
nition of positioning, rationalisation, organisational changes

(1) The most important of these were ‘Managing change’ of November
1998, the report of the group chaired by Pehr Gyllenhammer (on
which the EESC published a positive, albeit critical opinion: OJ C
258, 10.9.1999, and the Report of the High-level Group on
Industrial Relations and Change in the European Union of January
2002, produced by the group chaired by Maria João Rodrigues.
(2) European Parliament Resolution of 15.2.2001 on the social
consequences of industrial restructuring (B5-0089/2001) calling
for a more proactive approach to industrial restructuring and its
social consequences, stressing the need for continuous social
dialogue and recalling the provisions of the Treaty stating that the
objective of a high level of employment must be taken into
consideration in all Community policies and activities. ESC
Resolution of 11-12.3.2002 stressing the need for workers to be
continuously involved in the process of change and for the social
cost of restructuring to be minimised, and calling for research and
analysis to evaluate the scale and impact of company restructur-
ings by country and region. UNICE Resolution of 8.3.2002 calling
for exchanges of experience on anticipating and managing change.

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and bankruptcy (1). In a number of the cases analysed, the
transformation of the company led to completely new prod-
ucts and/or services, respectively to redeployment or even to
extension of the number of employees. These processes of
change of and within businesses are mostly related to sector-
specific developments. The way restructuring is implemented
from the social point of view is the result of a fruitful dialogue
between employers and workers.

anticipated. But at the same time we notice also that the
regional stakeholders — employers, trade unions, regional and
local authorities — have often mobilised and mobilise, in
forthcoming cases also in close cooperation with national
authorities and the European Union (e.g. in Rechar, Resider
and Retext) to create the basis for new perspectives. Restructur-
ing and modernisation processes implementing industrial
change have been and are underway, sometimes with surpris-
ingly positive results.

3.4.
These processes continue, despite the current economic
downturn. Indeed, this situation actually stimulates compe-
tition, as each firm seeks to secure its position in order to
safeguard its continuity. Although more attention is perhaps
now paid to costs, firms are still renewing their internal
organisation and positioning themselves for the future, not
forgetting industrial concentration through mergers and acqui-
sitions.

This intense restructuring activity has meant a sharp rise in job
losses. In the first nine months of 2001 230 000 jobs were
lost in the euro area and 350 000 throughout the EU. — The
high cost of these job losses, not only for individual workers,
but also for whole areas and regions, requires the adoption of
flanking measures and plans for the creation of alternative
jobs. This approach is already applied in a number of Member
States.

In this connection the EESC draws attention to the ICT
paradox. The economic stagnation of recent years was heralded
by a sharp fall in investment in the overheated ICT sector. But
that has not prevented this very sector (communications,
information, Internet) from bringing about radical changes in
the manufacturing and services sectors, giving traditional
sectors an entirely new appearance and spawning new firms,
new alliances between market partners and new manufacturing
and services packages. Not one sector has escaped this process
of renewal. It is, as it were, a new commodity. The next radical
renewal, this time in biotechnology, is imminent.

3.5.
Nonetheless, restructuring as an autonomous phenom-
enon is taking place in the Member States. The EESC points to
a number of examples of regional restructuring which leads to
redeployment of work and new development of companies
and the creation of new ones. Complicated processes were
often at the basis of such restructuring. Many European regions
have specific features, which are the result of their economic
history, geographical location and regional traditions. Some-
times, adaptation of industrial structures was not adequately

(1) cf: Case studies on the handling of the social impact of major
industrial restructuring Case studies, Bernard Brunhes, consultant,
for the European Commission, DGV (http://www.brunhes.com/
Etudligne/Cahiers/6/Cahier6.htm).

Examples of regions which have created numbers of new
companies and have changed patterns of existing ones include
the Ruhrgebiet (Germany) and Birmingham (United Kingdom)
with their changing structures from heavy industries to
service-oriented businesses, Oulu (Finland) with its strong
telecommunication sector, and Barcelona (Spain) which experi-
enced profound change on the occasion of the Olympic Games
in 1992.

3.6.
However, despite some proven successes, other areas
are still in mid-stream, such as Asturias, a region of Spain
which in the 1990s underwent major adjustments in the steel
and mining industries. Employment in the steel sector fell
from 23 000 workers to 8 000 currently, a net loss of 15 000.
The region also lost more than 17 000 jobs in the mining
industry. Efforts have been made by the Spanish central
government and by the regional government, and aid has been
forthcoming from the European Commission (ECSC Treaty,
Rechar and Resider programmes). Yet the problem has not
been resolved and, although the economy has regained some
vitality, it has not managed to replace even half of the jobs lost
in the sectors concerned or in related sectors. This clearly
highlights the continuing need for economic flanking measures
if the lost ground is to be made up and if economic life in this
region is to be developed to the full.

Other current examples are Liège (Belgium) and Bremen
(Germany), where Arcelor, the result of the merger of Arbed,
Aceralia and Usinor, has decided — against a backdrop of a
structural overcapacity in steel flat production and with a view
to improving synergies — progressively to close the Liège
steelworks and scale down production in Bremen. In the light
of
the job losses these measures will entail, Arcelor is
committed to assisting all those concerned, rehabilitating all
the sites affected and contributing to the reindustrialisation of
the local economic fabric, with the help of all the parties
involved. Support measures, like those set up some years ago
under the Rechar and Resider programmes, should stave off
hardship in these regions. The conditions also need to be
created for the sustainable development of these regions

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An important aspect of the current trend is not only
3.7.
that the character of individual firms is subject to change but
that it is becoming more difficult than in the past even to
distinguish one sector from another. A crucial change is that
the former clear-cut distinction between sectors has given way
to new rules of the game, characterised by interdependency,
interaction, networking and outsourcing. As most firms choose
their own way in the light of their vision of the future and
market position, the situation tends to vary from one individual
case or firm to another. An appropriate combination of
flexibility, employee involvement, continuous improvement
and stability is therefore needed.

3.8.
At all events, this rough sketch of these processes of
renewal, internationalisation and reorientation in the manufac-
turing and services sectors shows that the whole economy is
levels of
affected by these changes, which are felt at all
companies. This accounts for the strong emphasis placed by
the social partners in most countries on new forms of training
and skills development. Vocational mobility is a characteristic
of the current system of manufacturing and services. Tra-
ditional employment structures (i.e. shoemaking industry in
Choletais, France (1)) coexist with other, newer structures. And
of course many firms are still in transition from the ‘traditional’
to the new. But one notices also that traditional sectors such
as retailing and distribution centres are sometimes completely
restructured for the better. At all events, training and dialogue
are essential in order to tackle these transitions. The reorgan-
isation of vocational training and the wide opportunities which
are offered, and which must be offered, to ensure workers the
most secure future possible, are essential with a view to
flanking these changes, some of which have been enumerated
above.

3.9.
Human resources development is of course of funda-
mental significance. As the Lisbon European Council acknowl-
edged, the processes of change in companies and the creation
of new jobs, as well as competitiveness in Europe, are based
on research and innovation and on workers’ creativeness and
adaptability. Recognising the strategic importance of human
capital means:

— investing in the training and skills of workers throughout

their working lives;

— raising the ability of companies to adapt;

— involving workers in the management of change and the

creation of a new kind of security;

— facilitating access to employment for less skilled workers;

— developing social dialogue mechanisms in companies (2).

Nowadays the employee himself is also a source of change in
managing companies and, by that, of industrial change. Old
hierarchical structures are often replaced by organisational
frameworks that fully take into account the higher level of
competence of today’s employees.

3.10.
Recently, more emphasis has been placed on ‘corpor-
ate governance’. This is the sum of rules, codes and conduct
within companies, aiming to take account of the interests of
all stakeholders. Companies, especially those with a large
workforce, also have a societal responsibility, in the framework
of international competitiveness of courses. Corporate govern-
ance is channelling a number of problems related to a desirable
attitude of business in a wider context. In particular, as far as
industrial change is concerned, corporate governance is in the
interest of the companies themselves. It is relevant to issues
such as sustainability, transparency, effective supervision, etc.
and it aims to ensure good working relations and external
responsibility towards society. It is in this very field that the
specific features and values of the European social model must
take shape. Therefore, the recent proposal of the Commission
to put ‘corporate governance’ on the agenda of the EU is also
a positive step aiming at using our resources more efficiently
and producing with quality.

4. Conclusions and recommendations

It

is important

that confidence in the economic
4.1.
situation be restored. This is why the EESC supports the
outlines and objectives set out by the European Commission
and the European Council at the Spring Summit 2003, and
those set out in the Commission’s Ten-Point Plan aimed at
giving the economy a boost, creating jobs and, more generally,
implementing the Lisbon Strategy. Europe needs a climate
favourable to a new paradigm focused on ‘industrial change
with a human face’ which is based on competitiveness,
sustainable development and social and territorial cohesion.

(1) The case of the Choletais shoe-making industry, Aggeri Franck
and Pallez Frédérique — Centre de Gestion Scientifique, École des
mines de Paris, September 2001.

(2) Commission document: Anticipating and managing change: a
dynamic approach to the social aspects of corporate restructuring
— First phase of consultation of the Community cross-industry
and sectoral social partners (point 1.3).

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14.1.2004

The EESC recommends benchmarking, peer pressure
4.2.
and dissemination of best practices in areas affected by
industrial change and that comparative analysis should focus
on technological change,
innovation and social aspects. It
welcomes the European Commission initiative to publish
concrete comparative analyses between countries.

that

is essential

For the EESC it

innovation and
4.8.
research promotes European leadership both in terms of
competitiveness and of social welfare. Part of this will be at the
same time an answer to similar policies in other world regions,
such as the USA that promotes some industrial development
by government-driven actions in the defence sector (1).

The EESC is in favour of a horizontal industrial policy
4.3.
which at the same time allows the development of sectoral
approaches directly related to industrial change.

4.9.
The EESC considers that initiatives to promote the
cooperation between universities/knowledge centres and busi-
ness are desirable (2).

A sectoral approach must be accompanied by procedures for
consultation, participation of all players and social negotiation
in the framework of industrial restructuring, particularly in the
candidate countries.

4.4.
The EESC is in favour of systematic checks to establish
whether the rules and decisions drawn up and approved at
Community level are being complied with, as exceptions
would lead to a ‘Europe à la carte’.

4.5.
It is very important to ensure that representatives of
the sector are involved at all stages of the legislation processes
in the EU (bottom-up) in order that rules and decisions in
different policy areas are assessed in relation to industrial
change. The EESC stresses the need to ensure that competi-
tiveness and industrial change strategies are effectively and
consistently implemented. The CCIC will monitor this process
closely.

The EESC stresses the importance of ensuring that relocation
of industries is not purely inspired by increasing differences in
legislation between Member States, e.g. in environmental and
fiscal areas.

A short time ago the Competitiveness Council was
4.6.
established. The EESC welcomes this new approach. It is
desirable that issues and regulatory solutions be considered in
their context, keeping in mind the quality of jobs.

4.10.
The EESC believes that more attention should be paid
to the possible repercussions of certain Community provisions
and rules on SMEs.

4.11.
Coherent rules on remaining state subsidies must be
maintained in Europe. At the same time, the European Union
must continue to act, mainly through WTO, against misuse of
duties, like the US duties on steel products. This is important
in order to achieve a level playing field in international trade.

4.12.
To ensure a balanced environment for industries
undergoing change, the EESC encourages the European Com-
mission to exercise vigilance with regard to the application of
WTO rules, where gaps exist (3).

4.13.
The EESC draws attention to the need to focus on
different sorts of industrial change. The clearest distinction is
that between restructuring of mono-industrial regions and, on
the other hand, industrial change as an ongoing process of
adaptation of manufacturing industries and services. In the
first case, specific measures can be foreseen on a temporary
basis in the regions concerned.

The EESC stresses that consistency between different Com-
munity policies, e.g.
industrial, tax, regional,
energy, transport, competition, training and research fields, is
necessary in order to ensure the effectiveness of any policy on
industrial change.

in the social,

An effective impact assessment of European legislation
4.7.
is desirable. To that end, the EESC supports the proposal to
establish an independent advisory group for business impact
assessment of EU regulations, in order to improve the quality
of EU legislation.

(1) Opinion of the EESC on the Green Paper on European Space
Policy — OJ C 220, 16.9.2003, p 19; see also Opinion of the
EESC on the Commission’s Communication on European Defence
— Industrial and Market Issues — Towards an EU Defence
Equipment Policy (on which a complementary opinion has been
prepared by the CCIC).

(2) In this respect, it is interesting to note that by analogy with
Finland, the new Dutch Government has installed a platform for
interaction of knowledge centres and business under the direction
of the Prime Minister.

(3) For example, China, with regard to micro-electronics quotas,
South Korea with regard to shipyard subsidies and the USA with
regard to aid to the iron and steel industry.

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Official Journal of the European Union

C 10/113

The EESC recommends that the positive experiences with
sectoral programmes such as Rechar, Resider and Retext be
taken into account in modernising mono-industrial regions in
the future and existing Member States and that new forms of
social dialogue be promoted in these countries.

In regions particularly affected by relocation specific flanking
measures may be needed for a limited period.

industrial change, identify viable alternatives and minimise
their negative consequences. As the EESC has already pointed
out (1), another measure which would help to better anticipate
and manage industrial change would be ‘that European
companies of size (more than 1000 employees) should prepare
a Managing Change Report [which would] provide information
on what structural changes are foreseen and how they will be
managed’ (2).

In a number of cases, regions subject to industrial
4.14.
change benefit from a close cooperation between companies,
public authorities, social partners and, where appropriate,
other socio-economic sectors. The EESC invites the Com-
mission to publish details of pilot projects carried out in this
area, their successes and limitations, which can be of help to
regions in transition, in particular in the future Member States.

4.15.
The EESC stresses the importance of training pro-
grammes for personnel and calls on the Commission to take
into account all
these specific
programmes of vocational training, including private-sector
programmes. It would be appropriate to hold round tables on
the subject with the social partners from the various sectors.

the trends and results of

4.16.
The European Monitoring Centre on Change (EMCC),
established in 2001 within the Dublin European Foundation
for the Improvement of Living and Working Conditions as a
direct response to the call from the Gyllenhammar group, can
play a valuable role. In cooperation with the various economic
players (companies, social partners etc.) and national research
establishments, it provides specifically targeted information on
changes in particular sectors and industry in general and on
ways of anticipating and flanking these changes. The EESC
intends to further develop cooperation between the CCIC and
the EMCC.

4.17.
The EESC considers that the establishment of sectoral
observatories would make it easier to anticipate and implement

Brussels, 25 September 2003.

In order to exploit best practice, the EESC suggests
4.18.
that an evaluation should be made of companies with the best
record in restructuring processes on the basis of knowledge,
sustainability and social programmes (Lisbon Strategy).

4.19.
The EESC considers that social dialogue in companies
and, where appropriate, involving local players and public
authorities,
is an important and decisive tool to develop
competitiveness, social conditions and employment as well as
environmental protection in a productive balance. The EESC
experience and that of the former ECSC Consultative Com-
mittee demonstrated that establishment of a continuous sector-
based dialogue at European level in which representatives of
the producers, workers and other groups representing organ-
ised civil society (consumers, dealers etc) helps to establish a
useful basis for a renewed industrial policy.

4.20.
The future work of the CCIC, as a body within the
EESC, will concentrate on sectors and/or regions particularly
affected by industrial change and will be based on the approach
outlined in point 1.7 and on these conclusions.

(1) EESC Opinion on Managing Change — High level group on
economic and social implications of industrial change — Final
Report, point 3.2.3 — OJ C 258, 10.9.1999.

(2) Executive summary: Managing Change — High level group on
industrial change (Gyl-
implications of

economic and social
lenhammer report).

The President

of the European Economic and Social Committee

Roger BRIESCH