European Economic and Social Committee

PRESS RELEASE No. 74/2005 / 21 June 2005

JOSLY PIETTE, CHAIRMAN OF EESC COMMISSION ON INDUSTRIAL CHANGE:

CALLS FOR BETTER MANAGEMENT OF COMPANY RELOCATION PROCESSES IMPERATIVE FORN THE INTEREST OF EU COMPETITIVENESS IN GLOBAL MARKET!

This was the strong message delivered by On 17 June 2005, Josly Piette (Gr. II-B), Chairman of the EESC's Consultative Commission on Industrial Change (CCMI), gave the opening speech at a 17 June conference organised by the French Institute of International Relations in collaboration with the EESC, entitled on “Enlargement and globalisation: Location and competitiveness of firms in Europe”.

The CCMI is composed of members of the EESC and of a wide range of delegates from companies, trade unions and other bodies directly involved in industrial change issues.

In the speech, Mr Piette Company relocation, recognised Mr Piette, constituted a very real challenge to European society, both in terms of movement of firms from one EU Member State to another, and of relocation of companies to countries outside the EU, such as China.

The decision to locate a company in a particular region is a strategic one, based on a number of factors, not only labour costs. Company relocation within the EU, while sometimes painful in the short-term, is an undeniable fact of life, given EU enlargement and the cost variance that currently exists across the Union. In certain cases the opportunity to relocate internally has provided a new lease of life to firms otherwise unable to compete on the global market.

For the CCMI, external company relocation represents a far more serious long-term threat to European competitiveness for SMEs and major multi-nationals alike and in both old and new Member States. The EESC’s Consultative Committee on Industrial Change argues that, in order to reduce the likelihood of external relocation by EU companies, the EU-level approach should include:

Emphasis on the value of education and vocational qualification to ensure a competitive labour force

Support for research and development

Continued social dialogue and implementation of an appropriate social policy

Development of public/private partnerships in key sectors

Unified competition and industrial policy

Encouragement of entrepreneurial approach

Investment in infrastructure

Consumer awareness

Equipping the EU with appropriate financial tools to manage industrial change

Promotion by the EU of a level international playing field

Tpointed out that the effects of globalisation, EU enlargement and company relocation on European competitiveness have been the subject of thorough analysisthe subject of much analysis and discussion by the CCMIConsultative Commission on Industrial Change at the EESC, resulting in an own-initiative opinion on the subject, to be debated at the 13-14 Julyto be presented for adoption by the EESC Plenary next month. EESC Plenary.

The CCMI, which is composed of members of the EESC and of a wide range of delegates from companies, trade unions and other bodies directly involved in industrial change issues,

The CCMIhas concluded that notes that the struggle to ensure competitiveness of EU firms is intensifying. has intensified and much hinges on the EU’s ability to ensure a managed change process. Moreover, tThe recent expansion of the EU to include ten10 new Member States, with significantly lower levels of GDP than the average across the former EU-15 countries, has come precisely at a time when all industrialised nations are coming to terms with globalisation. Much will therefore hinge on the EU’s ability to ensure a managed change process.

Mr Piette made it clear that company relocation constitutes a very real challenge to European society both in terms of movement of firms from one EU Member State to another, and of relocation of companies to countries outside the EU, such as China. The decision to locate a company in a particular region is a strategic one, based on a number of factors, not only labour costs.

Company relocation within the EU, while sometimes painful in the short-term, is an undeniable fact of life, given EU enlargement and the cost variance that currently exists across the Union. In certain cases the opportunity to relocate internally has provided a new lease of life to firms otherwise unable to compete on the global market.

For the CCMI external company relocation represents a far more serious long-term threat to European competitiveness for SMEs and major multi-nationals alike and in both old and new Member States. In order to reduce the likelihood of external relocation by EU companies, the approach at EU level should include:

Emphasis on the value of education and vocational qualification to ensure a competitive labour force

Support for research and development

Continued social dialogue and implementation of an appropriate social policy

Development of public/private partnerships in key sectors

Unified competition and industrial policy

Encouragement of entrepreneurial approach

Investment in infrastructure

Consumer awareness

Equipping the EU with appropriate financial tools to manage industrial change

Promotion by the EU of an international level playing field

For further information please contact:

Christian Weger, EESC Press Office

99 rue Belliard, B-1040 Brussels

Tel.: 02 546 9586; Mobile: 0475 753 202

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The European Economic and Social Committee represents the different social and economic interest groups of organised civil society. Set up by the Treaty of Rome in 1957, it is a consultative EU institution. Its consultative role allows its members, and thus the organisations they represent, to take part in the Community decision-making process. Subsequent to enlargement the Committee has 317 members, who are appointed by the Council of Ministers for a four-year term.