EMCC European Monitoring Centre on Change

Perceptions of globalisation: attitudes and responses in the EU — Portugal

  • Observatory: EMCC
  • Topic:
  • Published on: 02 March 2008



About
Country:
Portugal
Author:
Heloísa Perista, Jorge Cabrita and Janine Nunes
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited or approved by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The main present economic and financial policies are aimed at attracting foreign investment in Portugal but more recently some measures were established under the National Plan for Growth and Employment in order to prevent and reduce the impact of relocation processes. Trade unions consider that restructuring is not unavoidable and find that the closure of companies due to relocation is unacceptable. Employers’ associations assume globalisation as an opportunity for development and economic growth while offshoring and relocation are issues not much approached.

Institutional responses to globalisation

Government action to prevent or reduce the extent of off shoring/relocation

Are there any recent examples in your country (i.e. over the past 3-4 years) of the government intervening to prevent particular activities from being relocated abroad or to reduce the scale of this?

Yes/No

If so, please give summary details and indicate the activities concerned

No interventions to prevent relocation but some interventions to reduce the consequences of relocations.

Although there are some policy measures in force which may have either a direct or indirect impact on offshoring, there is none specifically related to it. Most policy measures are aimed at promoting structural adjustment, improving the business environment and the competitiveness of the economy as a whole.

Some of the measures that can indirectly reduce the impact of offshoring processes are those implemented under the National Plan for Growth and Employment (PNACE, pdf in Portuguese). Most of these measures are related to qualification of human resources, employment and labour market policies but also restructuring processes. Therefore, one of its priority areas is aimed at preventing and managing predictable restructuring processes, including relocations abroad.

One of the main policy instruments of these measures is the Agency for Integrated Intervention for Enterprise Restructuring Processes (AGIIRE, see Portuguese contribution to ERM CAR on Individual Measures). Its main goals are:

  • to identify companies carrying out restructuring operations;
  • to assist companies in their restructuring processes so that they can contribute to the modernisation and improvement of the entrepreneurial environment, and to long-run sustainable employment;
  • to co-ordinate government intervention in respect of firms undergoing restructuring processes and to facilitate corporate recoveries;
  • to monitor corporate recoveries and avoid tax evasion; and,
  • to monitor processes resulting in the cessation of business activities, reducing their social costs.

AGIIRE is implementing a warning system aimed at anticipating firms’ decisions in respect of restructuring processes, overcoming possible difficulties and promoting the success of new opportunities which may occur.

No data on the outcomes of the activity of this agency is known until now.

Other policy instrument is the Centres for Fast and Personalised Intervention (NIRP- Núcleo de Intervenção Rápida e Personalizada, see Portuguese contribution to ERM CAR on Individual Measures). This instrument aims at providing local support for workers affected by restructuring processes, through swift application of policy measures with custom-tailored solutions to help them find new jobs and social protection, which include the creation of Mobile Employment Centres. These centres are set up near the companies which are restructuring, taking care of the situation and identifying the available resources. Two examples of the most recent actions taken by NIRP were those dealing with LEAR Corporation and ALCOA - Fujikura Portugal, SA, in order to reduce the impact on the local unemployment.

Lear Corporation, installed in Portugal since 1988, was a company manufacturing parts and accessories for motor vehicles and engines, employing 800 people. Due to its relocation, all workers were dismissed in 2005.

Alcoa – Fujikura Portugal, SA, installed in Portugal since 2001, also operated in the manufacture of parts and accessories for motor vehicles and their engines. From the 480 employees, about 400 were dismissed due to the relocation of this company in March, 2007.

No data on the outcomes of these actions is available.

Social partner attitudes towards off-shoring/relocation

Have there been cases over the past 3-4 years where the possibility – or threat – of relocation of production has featured as a factor in collective bargaining?

Yes/No

If so, please indicate the cases concerned, how the possibility has been used and whether its use has become a more frequent occurrence.

Yes.

According to General Union of Workers (UGT – União Geral de Trabalhadores), the relocation of production influences the trade unions proposals, therefore collective bargaining comprises this dimension. Nevertheless, there are no specific terms or clauses regarding this issue in the collective bargaining. UGT considers that the claim for continuous training of workers reflects the trade unions concern about the need to permanently adequate the qualifications to the companies and sectors needs, in a competitive world.

In terms of relocations, the trade unions intervention has been occurring mostly in the final phase of the processes. In this involvement, some ‘social plans’ covering compensations, occupational training access, leave of absence to search for new jobs, etc., have been negotiated.

In order to have a greater intervention in terms of prevention (before the decision is made), UGT stands up for the improvement of the processes of information, consultation and participation of workers and trade unions in companies.

On the other hand, UGT underlines that, in the globalisation and growing importance of multinational companies’ framework, the decision centres tend to be more distant from the ‘production’ centres, getting an early and active intervention of the trade unions even more difficult. UGT stands up for the reinforcement of the structures and instruments which allow for a transnational intervention.

UGT is also concerned with the need to, when contracting foreign direct investment, pay more attention to the corporate social responsibility, namely in terms of relocation.

Are there any cases over the past 3-4 years where trade unions have successfully resisted plans to relocate production abroad or have managed to reduce the extent of this?

Yes/No

Yes.

According to the General Confederation of the Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses – Intersindical Nacional, CGTP-IN) once the relocation decision is taken, companies do it without taking into account the consequences over workers, their families and the local and regional economies. Trade unions have been denunciating these processes, encouraging workers to struggle for the maintenance of their jobs, trying to involve populations, government and municipalities in the struggle for the companies’ maintenance. In some cases, due to the struggle of workers and their trade unions, one can observe transferences of workers from some production units to others belonging to the same group or company. However, most relocations have not been avoided. Most workers end up unemployed or attending training courses often not corresponding to the labour market demands.

Nevertheless, CGTP-IN mentioned some cases on which plans to relocate production abroad were deflected. Among other, they underlined the case of AutoEuropa. Established in Portugal in 1995, Autoeuropa manufactures motor vehicles and currently employs more than 3.200 workers. According to a CGTP-IN-IN’s representative, ‘recently, and from time to time, the press release statements mentioning that the next vehicle model will not be produced in Portugal because such and such country is more competitive than ours in terms of salaries’. According to the referred interlocutor, these statements have worked as a pressure over workers to accept a certain period without salary raises, to work more hours, etc.

In the case of Autoeuropa after a process of negotiation between workers, trade unions and the company, it was possible to maintain the jobs in this plant. Some working conditions were readapted, namely the process of counting and paying supplementary work. Workers accepted less beneficial conditions than those comprised in the collective agreement in order to keep their jobs and maintain the company in Portugal.

According to this trade union confederation, those movements and struggles also contribute to bring those companies’ strategies to public opinion, constituting important elements to condition the companies’ behaviour, raise their responsibility and reduce the ‘impunity environment’.

UGT states that trade unions have many difficulties to avoid relocations due to the fact that the decision centres of the multinational companies are far from the trade unions. However, there are some cases in which, due to the negotiation with workers and trade unions, some restructuring and relocation threats were deflected, as in Autoeuropa.

In other cases, due to the trade unions and workers action, higher values of compensation were obtained. This was the case of Lear Corporation, where the intervention of the National Industry and Energy Trade Union (SINDEL - Sindicato Nacional da Indústria e da Energia), through contacts with its administration (not only in Portugal, but also with the chairman of the Multinational) as well as with the local and national authorities, allowed for an earlier intervention in the production unit of Póvoa do Lanhoso and the postponement of its closure. Although it was not possible to save the jobs, a dialogue process with the workers was initiated and a social plan was agreed which allowed, among other things, to double the compulsory compensations due to the collective dismissal.

If so, please indicate the cases concerned and outline their main features Are there any cases where trade unions have accepted the need for the relocation of production – or part of it – abroad as a means of maintaining or improving the viability of companies and so of preserving some jobs and even ultimately expanding them?

Yes/No

If so, please briefly describe the cases concerned

No.

Government policy on foreign-owned firms controlling significant sections of the economy

Does the Government in your country have an explicit policy on restricting the acquisition of domestic companies in certain sectors by foreign-owned firms?

Yes/No

If so, please give summary details and indicate which sectors this applies to as well as whether any distinction is made between companies according to their nationality (e.g. whether non-European companies are treated differently from European ones)

No.

The present government does not have any explicit policies restricting acquisition of domestic companies. Most economic and financial policies are aimed to attract foreign investment, regardless of the sector.

Are there any restrictions on foreign-owned companies setting up branches or subsidiaries in your country either generally or in specific sectors?

Yes/No

Please indicate the sectors concerned and the stated reasons for the restrictions. Please also indicate whether the restriction apply to companies from other parts of the EU as well as from outside

Are there any sectors of the economy in which the acquisition of a domestic company has not been allowed over the past 3-4 years?

Yes/No

If so, please indicate the sectors concerned and the nationality of the foreign companies involved as well as the reasons given for the decision

Social partner responses to the take-over of domestic firms by foreign-owned ones

Have there been any recent cases (i.e. over the past 3-4 years) where trade unions have resisted foreign acquisition of domestic companies explicitly because of the nationality of the company concerned?

Yes/No

If so, please give summary details, indicating whether there is any evidence of different attitudes being shown towards European firms as opposed to companies from outside Europe

No.

Have there been any recent cases (i.e. over the past 3-4 years) where domestic companies have resisted acquisition by a foreign-owned firm on the grounds of its nationality?

Yes/No

If so, please give summary details, indicating the nationality of the company concerned and whether there is any evidence of European and non-European companies being regarded differently in this regard.

No.

Attitudes to globalisation

Have employers’ associations in your country adopted a stated position as regards the main aspects of globalisation – i.e. outsourcing or the relocation of production abroad and the acquisition of domestic companies by foreign-owned ones?

Yes/No

If so, please give summary details, indicating whether or not the position varies across sectors of the economy

No.

Most employers’ associations are concerned with their associates (i.e. companies) and their specific problems. Therefore, outsourcing and relocation of production abroad and the acquisition of domestic companies by foreign-owned ones are not current issues in their speeches or interventions.

However, the globalisation process arises as an issue when, for example, the Portuguese Industrial Confederation (Confederação da Indústria Portuguesa) and the Portuguese Industrial Association (Associação Industrial Portuguesa) state one of their top priorities regarding the evaluation of the implementation of the Lisbon Strategy in Portugal: ‘labour legislation should take into account the needs of change and adaptability of companies imposed by globalisation, broadening the polyvalence of workers and turning work organisation in companies and sectors more flexible.’

Have trade unions in your country adopted a stated position as regards the main aspects of globalisation – i.e. outsourcing or the relocation of production abroad and the acquisition of domestic companies by foreign-owned ones?

Yes/No*

If so, please give summary details, indicating whether or not the position varies across sectors of the economy

*A Eurobarometer survey on globalisation was carried out in 2003 in the EU-15 Member States. This might serve as a useful point of reference for the countries concerned, to see, for example, whether or not national attitudes expressed in the survey are in line with similar surveys which have been conducted nationally. The survey findings are available at:

http://ec.europa.eu/public_opinion/flash/FL151bGlobalisationREPORT.pdf

According to the General Confederation of the Portuguese Workers, due to the ‘search for profitability at any price’, emphasised by the economic integration reinforcement, the EU enlargement and the capital concentration, the movements of mergers and acquisitions, restructuring and relocations are growing, with deep negative social consequences. This confederation considers that restructuring is not unavoidable and that shutting down of companies due to relocation to more profitable countries is unacceptable. CGTP-IN underlines that companies are being closed in regions were no real alternatives jobs are available and that the risks of relocation also comprise advanced technology companies.

As the jobs suppression and dismissals are reproved, this confederation proposes the following measures:

Active search for alternative measures such as reclassifications, training, occupational reconversion, etc.;

Involvement of workers in the processes of restructuring and relocation and development of information and consultation rights;

Transference of workers without loss of rights to other companies or establishments of the same economic group, if that avoids the dismissals;

Application or reinforcement of the sanctions to companies which do not seek for alternative solutions to collective dismissals;

Search of new entrepreneurs for interrupted or ceased activities.

Moreover, CGTP-IN stands up for the contractual compromise of companies which invest in foreign countries through the support of the receptor country, i.e., these companies should be responsible for the non fulfilment of the commitments established arising from restructuring and relocation processes.

In what regards the European enlargement, the CGTP-IN position is not an opposing one. However, CGTP-IN emphasize that some risks may arise from the enlargement, namely a lower foreign investment attraction capacity and the risk of companies’ relocation. Therefore, in its vision the answer must be the change of economic and financial policies which ‘should dynamise a direct foreign investment with quality’. According to CGTP-IN, the problem is not in the incentives provided by the authorities but in the need to provide more rigour in its attribution, monitoring and even demanding responsibilities, compensations and penalisations to relocating companies.

Have there been any surveys of public opinion in your country over the past 3-4 years on attitudes towards globalisation or on the various dimensions of this (as listed above)?

Yes/No

If so, please summarise the main findings of these. Please give a breakdown, where possible, in terms of the characteristics of respondents (e.g. by sex, age, socio-economic group, education level, occupation, sector of employment or region).

Yes.

In 2001, a public opinion survey regarding globalisation was carried out, promoted by a national daily newspaper (Diário de Notícias) and a Marketing Research company (Marktest). For the time being, the only available information on this survey refers that some 251 individuals were inquired and that 23.4% considered that the globalisation is positive for Portugal but 29.2% stated the opposite. 26.6% answered that they find globalisation neither good nor bad for Portugal.

According to this survey, younger individuals seem to be more seduced by globalisation. About 30% of the respondents aged between 18 and 24 years old found this phenomenon good for Portugal. Within individuals aged between 25 and 34 years, opinions are split: 26.5% stated a negative opinion about globalization and the same percentage mentioned the opposite. In the next age cohort (35-44 years) the percentage of those who are pro globalisation is also higher than of those against it (27.3% and 22.7%, respectively). The surveyed individuals aged over 45 years old are more anti-globalisation, considering it something pernicious for the country.

Have these surveys made a distinction between the different dimensions of globalisation (as listed above) or have separate surveys been carried out on these dimensions?

Yes/No

If so, please summarise the main findings of these as regards:

off-shoring (or the relocation of production abroad;

the take-over of domestic companies by foreign-owned ones and/or the growing extent of control by foreign companies of parts of the domestic economy

the establishment of new plants and offices by foreign-owned companies

Where possible, please give a breakdown in each case in terms of the characteristics of respondents (e.g. by sex, age, socio-economic group, education level, occupation, sector of employment or region)

No.

Have these surveys made an explicit distinction between globalisation and the process of European integration, by, for example, distinguishing between relocation of production to other EU Member States and relocation to countries outside the EU or between the take-over of domestic companies by EU-owned firms and take-over by a non-EU companies?

Yes/No

If so, please give summary details of the differences in response to EU integration as opposed to globalisation.

No.

Heloisa Perista, Jorge Cabrita and Janine Nunes, CESIS

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