Trade unions agree progressive redundancy programme at Villeroy & Boch

After a 240-year presence in Luxembourg City’s industrial landscape, the announcement by the Villeroy & Boch ceramics company of the termination of its production activities in Luxembourg has provoked astonishment. The two production lines in Luxembourg will cease activity by the end of June 2010. Amid fears of immediate mass redundancies, the company reiterated its promise not to dismiss anyone before 2010 and to negotiate a job retention plan in a relaxed atmosphere.

Shock over Villeroy & Boch closure

Villeroy & Boch ceramics is one of Luxembourg’s oldest factories. The first production site was set up in 1767. In 2001, the company employed 700 people, and still has a workforce of some 300 people today. The announcement (see ERM fact sheet 13885) by the company to close its production facility in Luxembourg was met with a mixture of surprise, fury and sadness. In 2003, €20 million was invested into the company’s production site in Luxembourg, which recorded good results in recent years. In a press release, the Luxembourg City Commercial Union (Union Commerciale de la Ville de Luxembourg, UCVL) expressed surprise and sadness at the announcement of the site’s impending closure. The Minister for the Economy, Jeannot Krecké, was angered by the announcement as he believed that Villeroy & Boch was using the economic crisis as a pretext to hasten a closure that had probably been planned for a long time. The trade unions were concerned that redundancy notices might be issued swiftly and called on the management to adhere to its social responsibilities. The priority for the trade unions is to negotiate the conditions under which workers will carry on working and to agree a programme to help the workers find new jobs.

Progressive redundancy programme

The trade unions are demanding a progressive redundancy programme offering all workers opportunities to retrain. A few weeks previous to Villeroy & Boch’s announcement, the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerkschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) criticised the company’s management, accusing it of going back on its promise not to plan any redundancies in 2009. Following one of the more recent meetings between the various parties, tempers have cooled, and negotiations about the immediate future of the 230 workers at the Luxembourg site have commenced in a calmer atmosphere. The management has clearly reiterated its promise not to carry out any redundancies this year and blamed the trade unions’ reaction on a lack of communication.

Job retention measures

A job retention plan is currently being drafted by the company. In addition to the short-time working approach, workers will be entitled to six days of extra leave in order to attend training or travel to job interviews. A redeployment unit will be set up to help the workers to find new jobs. Moreover, Villeroy & Boch is looking for solutions to reintroduce activities that the company had formerly outsourced in order to enable workers to remain in work for as long as possible.

However, this task will not be easy. The workers’ average age is particularly high, with many of them having worked for more than 35 years in the company. Moreover, many workers only have skills specifically related to their job at the Villeroy & Boch factory.

Rumours about reasons for company closure

The company emphasises structural causes as the main reason for its decision to cease activities at its Luxembourg site. The management would like to recentralise production in Germany. In an attempt to put a stop to rumours that the sites’ closure was connected with a property transaction, the Villeroy and Boch management stated that the luxury ceramics sector is currently going through a crisis due to changes in consumer behaviour and strong competition from crockery manufacturers outside Europe. The sale of certain buildings owned by the company in Luxembourg has indeed raised some funds, but according to the management, the production facility due to be closed had been idle for over three years. However, some observers have drawn a link between the sale of the Luxembourg site and the relocation of production to Merzig in southwest Germany and Torgau in eastern Germany, where property prices are much lower than in Luxembourg.

Odette Wlodarski, Prevent

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