Ref : (SL/YL industriAll 26) 3 September 2013
Resolution on the glass industry
An industrial policy to guarantee employment in the European glass sector
1. Challenging economic times
Since 2008, the impact of the economic crisis on employment in the manufacturing industries, particularly in the glass sector, has been ongoing, with devastating consequences for many citizens across Europe.
The glass industry is being doubly impacted by this, since its activity relies heavily on the economic health of other sectors such as the construction and automotive sectors. Weak economic growth and slowing domestic demand are specifically due to the austerity policies coordinated at European level and together account for the crisis that is affecting the sector. Far from kickstarting growth, these austerity policies together with wage moderation are having a negative impact on our industry. Indeed, the sector is continuing its growth in China, India and the emerging countries.
Between 2005 and 2010, flat glass, which accounts for 29% of the sector in Europe, was affected by a 7% drop in production following the crisis in 2008. In 2013, 15 out of a total of 60 floats in Europe have been stopped. Several of them have closed or are in danger of disappearing altogether. Meanwhile, container glass, which comprises 62% of the sector, has suffered a slump of more than 10% as a result of the economic crisis and the trend to relocate. The same pattern was observed in the glass fibre sector in 2009, but this sector now appears to be picking up once more. Lastly, in terms of competition from countries who are undercutting on salaries, tableware and solar panels are the sectors that have most been affected.
On this note, the biggest economic players, namely Saint Gobain, Nippon Sheet Glass, Asahi Glass Company, Owens-Illinois and Guardian Industries, have suppressed European production capacity and employment and have all made a dash towards Asia and the emerging countries whilst reducing, or even abandoning altogether, their investments in Western Europe. That said, new production lines have been opened in the CEE (Central and Eastern European) countries. In the flat glass industry, some new players from outside of Europe are appearing on the market.
2. The impact of rises in production and overcapacity on employment
Following a constant increase in demand up until 2007 for flat glass, from 2008 onwards the demand dropped sharply. This was due to a decrease in production in the automotive industry, together with the relocation of assembly lines, competition from China for solar panels and the slowing of the construction sector. These four factors have together resulted in an unexpected 20% overcapacity of floats, due to the traditionally risky strategy of multinational companies.
From 2000 to 2010, the sector lost 32% of its jobs, mainly in Germany, Poland, France, Czech Republic, Italy, Belgium and Austria. Since 2010, it would be fair to say that the situation has deteriorated even more rapidly.
These job losses are also due to the introduction of new working practices within the companies, an increase in the number of hours worked, the capital intensity of production, a drop in prices due to overcapacity and to the shareholders’ demands to maintain levels of double-digits returns for the capital invested. Furthermore, at European level, we are also seeing competition between sites, relocations, social dumping, even tax or environmental shopping to reduce costs, whilst sacrificing quality employment and know-how through the de-industrialisation of entire regions. Furthermore, large companies are benefitting from state aids without any consideration to the creation of employment opportunities or investments and in some European Union countries increases in energy prices have lead to increases in the costs of glass production.
3. An industrial policy which supports employment in the glass industry
A true industrial policy should be underpinned by an economic plan that re-launches the industry at European level and by abandoning short-sighted austerity policies. This, with the aim of enabling the industry to reach 20% of the European GDP as swiftly as possible (the industry currently accounts for 16% of the European GDP). Nevertheless, the future of the glass sector will also depend on the increase of investments in research, development and innovation, to work towards a low carbon and sustainable development-led society.
In particular, it is believed that there are some promising developments in the energy efficiency of glass, its climatic, acoustic and luminous qualities, “smart glass” complete with new features, weight reduction and resistance of materials, self-cleaning glass, lead-free materials in glassware, etc.
In order to promote these investments within Europe, public subsidies - whether national or European - granted to companies should be linked to the maintenance of employment guarantees within the different regions concerned, to the implementation of collective bargaining agreements, to the supporting of sustainable development, to the issue of competitiveness as well as to the use of local suppliers.
Furthermore, state aids – particularly for low-income households – could also sustain the sector, so long as these state aids and tax benefits also profit the local SMEs that are active within the glass sector. These state benefits could be used to improve building insulation, to achieve energy-efficiency standards for new constructions within the public and private sectors, to improve energy efficiency in public buildings, to develop solar energy technologies and so on.
Furthermore, energy represents at least 22% of production costs (whilst labour accounts for 16%). This energy bill could be reduced through improvements in the production process, through increasing energy efficiency and improving market regulations regarding pricing to support industrial activity, as well as through European legislation on environmental sustainability.
Waste recovery and cogeneration are also avenues that need to be explored, by increasing glass recycling and by creating a sector for the recycling of flat glass.
Lastly, EU Border Adjustment Measures need to be put in place promptly for all countries who fail to respect the minimum social and environmental standards, in the context of unfair competition. On this note, there is also a need to reconsider the European Union‘s current customs policy regarding the importing of glass products to Europe.
The resurgence of regions with the cooperation of all stakeholders at local, national and European level, will hinge on the mechanisms that are in place to help support and modernise the traditional industries, including the smaller ones, so as to keep the production base and know-how as well as the experienced and motivated workforce within Europe.
4. A quality social dialogue in order to manage these transitions
For a long time, industriAll European Trade Union has been in favour of the setting up of a European Sectoral Social Dialogue Committee for Glass, in order to support the industrial transition, prevent job losses and to sustain the sector.
The social dialogue is also necessary within the companies, in order to influence debates on issues such as European energy policy, as well as ensuring the monitoring of training policies, planning ahead for restructuring, preparing for employment transitions, preventing work-related accidents and occupational diseases (crystalline silica agreement) and improving working conditions. This also involves recognition of the fact that this is a tough sector to work in, with occupational diseases and accidents which have an impact on the health of employees.
IndustriAll Europe and IndustriALL Global Union will work together to support and develop employment in this sector.
It is also a question of ensuring that the companies assume their social responsibility in the case of restructuring, both as far as the workers are concerned as well as the regions that are affected by the job losses.
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