Philips consults Dutch unions over reorganisation

In November 1998, Philips invited Dutch trade unions for further consultations concerning worldwide reorganisation plans. At the same time, a rapid series of reorganisations have been taking place across the company's Dutch operations over late 1998.

On 18 November 1998, Cor Boonstra, the chief executive officer of the giant electronics group, Philips, explained to trade unions why the number of company factories would be cut by a third worldwide. Earlier, Mr Boonstra's announcement of the restructuring in the UK Financial Times caused a huge uproar amongst the unions, whose members felt "ambushed" (NL9811106F). Following consultations, however, the unions indicated understanding of the plans. Regular consultative relations were restored when Mr Boonstra criticised his own handling of the announcement.

In addition to the trade unions and virtually every political party in the Lower House of the Dutch Parliament, Klaas George de Vries, the Minister of Social Affairs and Employment, also expressed his concerns about Philips' plans. The minister had harsh criticisms about the manner in which both Philips and KPN Telecom (NL9811106F) had made their reorganisation plans public. Mr De Vries said that he would raise the matter during forthcoming consultations with the largest employer's organisation, the Confederation of Netherlands Industries and Employers (VNO-NCO).

Meanwhile, on 16 November, Philips announced that approximately 150 of the 700 jobs at Philips Components in Roermond would be eliminated. While the group has not ruled out compulsory redundancies, it expects 50 production workers to be employed by Philips elsewhere and a further 50 employees gradually to leave and not be replaced. Part of this production is being transferred to Taiwan.

Two days later, it was announced that Philips had reached an agreement with the unions over a settlement for 192 people on the brink of losing their jobs in Hoogeveen. On 23 November, it was announced that 210 of the 1,100 jobs at the Philips establishment in Stadskanaal would be cut because of the relocation of the diodes department to the Philippines. Management expects to avoid compulsory redundancies. While the unions recognise the need to reorganise the loss-making production department, they have concerns about Philips' policy on recruiting temporary personnel. Both Hoogeveen and Stadskanaal are located in the north-eastern region of the Netherlands, where unemployment is proportionally higher than elsewhere in the country. The unions have asked Philips to create other jobs in the same region to help compensate for these latest losses.