EU-level initiatives in restructuring processes in automotive sector

In April 2006, Peugeot announced the closure of its plant at Ryton in the UK. Subsequently, in June 2006, the management at General Motors Europe confirmed its decision to close the Azambuja plant in Portugal. Both the European Works Council and the European Metalworkers’ Federation were involved in the restructuring processes in different ways.

Threat of job loss at GM Europe

Growing conflict has emerged within General Motors (GM) about the future of the group’s European plants. The cessation of one shift at the Ellesmere Port plant in the UK (UK0606019I) and the decision to close the Azambuja plant in Portugal (HU0607069I) represent the most serious challenges faced to date by the company’s European Works Council, known as the European Employees’ Forum (EEF), and by its strategy of cross-border coordination.

The EEF fears that up to 30,000 jobs could be lost in Europe by 2014, due to the closure of GM European plants and related supply firms. In the context of former restructuring processes, the EEF negotiated framework agreements at European level, which were to be implemented at national level, reflecting local legislation, customs and practice. These negotiations were backed and strengthened by European ‘days of action’ (EU0411201N), coordinated and organised by the European Metalworkers’ Federation (EMF).

First European solidarity pledge at GM Europe

The main lesson drawn by the works councils and trade unions from these experiences is the importance of their involvement at the early stage of future restructuring processes, in order to avoid plant closures. As a decision is due to be made in 2007 concerning future production of the Delta platform for the Astra and the Zafira, a group known as the Joint Delta Working Group (JDWG) was set up within the EMF in the winter of 2005. The latter group includes plant-level employee representatives and the national unions of the five sites affected, namely: Antwerp (Netherlands), Bochum (Germany), Ellesmere Port (UK), Gliwice (Poland) and Trollhättan (Sweden). The working group aims to contribute to the development of a joint strategy based on the ‘principles for equable and equitable plant utilisation at all European General Motors sites’.

In November 2005, the EU project ‘Requirements and perspectives of the General Motors Europe employees cooperation’ (GMEECO) was launched. The project aims to set up a cross-border negotiating body and to establish rules and tools for cooperation. Furthermore, the project seeks to provide research support for the development of an alternative competition strategy, taking into account plant-level, regional and social factors. Thus, this strategy should contribute to promoting social dialogue and formulating a cross-border framework agreement.

As a first step, the European solidarity pledge (136Kb PDF) was introduced, establishing common objectives and procedures. The pledge was signed in December 2005 by the EEF, EMF, national trade unions and plant-level employee representatives. The pledge challenges the company’s competitive approach with an approach based on solidarity. However, in the case of the job cuts at the Ellesmere Port plant, the Delta working group was unsuccessful since the management rejected the alternative proposals put forward by the employee representatives.

PSA restructuring case

In April 2006, PSA Peugeot Citroën announced the closure of its Ryton site in the UK (UK0605029I). The latter decision was taken without prior consultation of the European Works Council (EWC). Following their decision to oppose the closure of the production site, British and French trade unions under the coordination of the EMF decided to hold a rally in front of PSA’s headquarters in Paris. The aim of the protest was to reiterate the European unions’ stand, namely: their opposition to the closure of the Ryton site; their solidarity with their British colleagues; their demand that management give proper consideration to all alternative industrial solutions, especially to those put forward by their British colleagues, with a view to pursuing activities at Ryton; their call for discussions with management regarding the PSA Group’s future industrial strategy.

According to the national trade unions involved, at the very time when the PSA management was negotiating an International Framework Agreement (32Kb PDF) (EU0603019I) on corporate social responsibility, it was busy planning for the announcement of the Ryton site closure, in clear disregard of the employees’ right to information and consultation.


The two cases illustrate the attempts made by employee representatives and trade unions to develop responses to restructuring processes at European level. Although the GM Europe EEF, in cooperation with the EMF, national trade unions and plant-level employee representatives, could not prevent the GM management from cutting jobs in the UK, it has shown itself to be capable of developing a joint strategy at European level. In theory, the GMEECO project is also meant to serve as a model for employee representation in other transnational enterprises. However, the case of PSA shows that there are still significant differences with regard to the experiences of cross-border coordination of EWCs.

In the case of GM Europe, employee representatives have so far focused on the European-wide site selection process. The future challenge will also involve formulating responses to the global site competition that GM is quite likely to implement.

Volker Telljohann and Maite Tapia, Institute for Labour Foundation, Bologna

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