Belgian textile industry in crisis
In September 2008, five Belgian textile manufacturers announced significant restructuring measures, which are set to result in hundreds of job losses for each company. The Belgian Federation for the Textile Industry, Wood and Furniture is predicting some 2,000 job losses in the industry in 2008. The crisis is being attributed to stronger competition from industries in Asia and eastern Europe, the increasing cost of raw materials and employment, and a reduced demand for carpets in western Europe.
Since early September 2008, significant job losses have been announced in Belgium’s textile industry. More specifically, five prominent manufacturers – Bekaert Textiles, Uco, Beaulieu, Domo and Ralos – announced restructuring measures or plant closures, which are set to affect over 1,500 jobs. According to the Belgian Federation for the Textile Industry, Wood and Furniture (Fédération belge de l’industrie textile, du bois et de l’ameublement/Belgische federatie van de textile-, hout- en meubelindustrie, Fedustria), the sector lost an average of about 1,000 jobs each year. However, its expectations for 2008 were less favourable, with the federation predicting earlier this year some 2,000 job losses by year end – to date, 1,800 jobs have already been lost since the beginning of the year.
Reduced demand and higher competition
Textile industries in Belgium are mainly active in the manufacture of carpets and rugs, which are sold in western Europe, particularly in the United Kingdom (UK). However, the increased popularity of laminate flooring has posed a significant threat to carpet and rug sales for many years. The UK is still an important consumer of carpets, and the British market represents one third of sales in carpets and rugs manufactured in Belgium. Nevertheless, the economic slowdown and drop in the value of the British pound have contributed to a significant reduction in UK demand, which means that the sector is overproducing.
Other factors are also responsible for the slowdown in the sector. For instance, the Belgian textile industry is facing growing competition from Asian and eastern European countries, which are able to offer lower prices than Belgium, where the cost of employment is much higher. At the same time, the increase in energy costs – particularly for transport and production – is having a negative impact on prices.
The annual sales turnover for the sector is expected to drop by €750 million this year, without any improvement forecast. However, according to a textile spokesperson from Fedustria, increased specialisation and new technologies represent key solutions for developing a new kind of textile industry in Belgium.
Trade unions surprised by extent of job loss
For now, thousands of workers are set to lose their jobs before the end of the year. The trade unions have expressed surprise at the extent and outcome of restructuring in the industry. An employee representative from the company Beaulieu commented: ‘We expected a restructuring but not the complete closure of the site’. However, the representative admitted that the company’s turnover had fallen significantly and unexpectedly over the last three months.
Meanwhile, the series of restructuring announcements have generated reactions from the three main trade union federations: the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV), the Federation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicats Libéraux de Belgique/Algemene Centrale der Liberale Vakbonden van België, CGSLB/ACLVB) and the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV). At a general national strike held on 6 October 2008 in protest against the loss of purchasing power, workers in the textile industry expressed their concerns about a dismantling of the Belgian textile industry.
Textile manufacturers are currently facing a considerable drop in demand for their products in Europe, while the cost of production and employment is increasing and competition from Asian and eastern European industries is stronger than ever. The series of prominent collective redundancies announced in the industry highlight the need for a serious response from the social partners and public authorities. Moreover, the structure of the European textile industry needs to be reconsidered: new technologies, types of products and markets are considered crucial for the redevelopment of textile manufacturing.
Emmanuelle Perin, Institute for Labour Studies (IST), Catholic University of Louvain (UCL)