Restructuring results in major redundancies in Northern Jutland
Within the space of a week in January 2004, three large companies in Denmark's Northern Jutland region announced plant closures or restructuring, with 1,300 employees to be made redundant as a result. The job losses will have a significant impact on employment in the region and leave the labour market authorities and other parties involved with a major problem in finding new jobs or retraining for the redundant workers.
In January 2004, around 1,300 workers were given notice of redundancy in the Northern Jutland region of Denmark. Within the space of a week, three large companies employing a significant part of the regional labour force announced either plant closures or extensive restructuring.
On 15 January, the largest industrial company in Northern Jutland, Flextronics, announced the redundancy of up to 700 employees out of 1,000 at its location in Pandrup. This was the second recent round of dismissals in connection with restructuring at this company. In August 2003, Flextronics made redundant 500 of its then workforce of 1,500 employees. Flextronics produces electronic devices for telecommunications and previously held extensive orders from the German industrial group, Siemens, which had a majority of its cellular phones made in Pandrup. However, production is now being moved to eastern European countries, where Siemens has placed a considerable part of its orders.
On the same day, a Danish producer of so-called 'intelligent light', the Martin Group, announced the redundancy of 110 employees at its plant in Fredrikshavn and 17 employees at its headquarters in Århus. The Martin Group, which manufactures lighting equipment and electric lamps, has 939 employees in Denmark. The main reason given for the job losses is a fall in the value of the US dollar by 25% in relation to the Danish krone. The Martin Group has thus had to raise its prices on the US market by 11%.
On 20 January, the largest Danish meat producer, Danish Crown, announced the closure of its operation in Nørresundby in summer 2004, with the loss of 525 jobs. Danish Crown will open a new, more modern and larger factory in Horsens in the southern part of Jutland in late summer 2004, and although it will employ around 1,400 people the redundant employees from Nørresundby will not be guaranteed re-employment there. The same goes for 480 employees at another Danish Crown factory in Bjerringbro in the region south of Nortern Jutland that will close at the same time. Overall, the past year has seen massive restructuring at Danish Crown, with its facilities in Esbjerg (550 employees) and Ebeltoft (180 employees) closed in the first half of 2003.
In line with the legislation on collective redundancies (DK0311102T), the Public Employment Service (Arbejdsformidlingen, AF) has been informed about the job losses, and cooperation has begun between the companies involved and AF in order to find possibilities of training or new jobs for the redundant workers. This will be difficult since the three companies employ a substantial part of the labour force in the region and no other companies in the area seem to have either the capacity or the need to hire large numbers of new workers. At the end of January, the Minister of Employment announced that the redundant employees at Flextronics will receive extra funds for further training and upskilling, so that the added financial burden on AF's Northern Jutland office will not hinder the chances of offering the necessary opportunities for the newly redundant workers.
The restructuring and redundancies in Nothern Jutland have strengthened the current discussion about globalisation and outsourcing and how the Danish labour market should react to the fact that many jobs are being outsourced to low-wage countries (DK0402102N).