businessman-hands-euro-banknotes-money-bag-28941305The EU plans to contribute €6.3m to a support package for 611 Danish workers laid off by wind turbine giant Vestas because they were victims of Chinese competition.

The European Commission set up its little-known European Globalisation Adjustment Fund back in 2007 to help European workers who loses their jobs due to ‘changing global trade patterns’.

The EGF co-funds measures to help affected workers find new work, including offering them mentoring and coaching, training packages, help with business start-up, and subsistence and entrepreneurship allowances.

Brussels plans to contribute half of a total €12.7m package, with the rest coming from the Danish government.

An EC statement said the ex-Vestas employees qualify because of the rapid emergence of the Chinese wind turbine industry, which has seen Europe’s share of the global market plunge.

Once hailed as the Europe’s brightest star in the renewable energy sector, Vestas has been under pressure in recent years from the recession in Europe and lower subsidies by various governments for alternative energy.

Management guru Peter Drucker has analysed the ‘five deadly business sins’ made by Vestas. Sure, low-cost Chinese competitors have played their part but Chinese competition is a given in any manufacturing sector these days and it is far from the whole story, as Drucker explains.

Nokia, another fallen European hi-tech star, is also requesting help from the EGF fund for more than 4,500 workers. Most come from Nokia’s handset business, now part of  Microsoft,  but there have also been layoffs  at its equipment manufacturing subsidiary Nokia-Siemens Networks.

Im not sure whether Nokia’s fall from grace as  handset king can be pinned on globalization; its inability to adapt to shifting consumer tastes probably have more to do with it. As for Nokia-Siemens Networks, analysts have long doubted the logic of Nokia and Siemens forming this joint venture back in 2006.

The advent of Chinese competition in the shape of Huawei has simply hastened the inevitable resizing and layoffs.

In a globalized world, it seems a bit lame to encourage multinationals to use the excuse of globalization when they want to lay off staff, particularly if those same businesses get most of their sales from international markets.

email