Measures and tools to anticipate restructuring

Transcription

1 Measures and tools to anticipate restructuring Henrik Mahncke October 2010 Oxford Research A/S Falkoner Allé Frederiksberg C Denmark Oxford Research AB Box Malmö Sweden Oxford Research AS Kjøita Kristiansand Norway

2 Restructuring in Denmark Danish definition of economic redundancy: Redundancy implemented by an employer for one or more reasons, which cannot be ascribed to the employee Danish Ministry of Employment

3 Restructuring in Denmark Agenda: The current situation in Denmark Anticipation for restructuring Case: Lindoe Ship Yard

4 Danish unemployment age Full dark blue: Overall Full light blue: years of age Full grey: years of age Dotted dark blue: years of age Dotted light blue: years of age Dotted grey: years of age Green: 60 years old or more Source: Statistics Denmark Source: Flemming Ipsen, University of Aalborg

5 Danish unemployment gender Dark blue: Overall Light blue: Men Grey: Women Source: Statistics Denmark Source: Flemming Ipsen, University of Aalborg

6 Bankruptcies Number of monthly bankruptcies Source: Statistics Denmark Source: Flemming Ipsen, University of Aalborg

7 Destination of international outsourcing (%) 32 32! "#" $! "# %!&!'( Source: Flemming Ipsen, University of Aalborg

8 Planned number of Danish job cuts and job creations )$ )$ ) ) ) $ ) $ * )* $)$ )$ )!&+## ),+ Source: Flemming Ipsen, University of Aalborg

9 How serious is this? Conclusion: DO WE HAVE A PROBLEM I DENMARK?

10 Conclusion on current situation Current situation - Conclusion: Coming from historical low we do face sharp increases in unemployment Danish companies are restructuring at the moment expanding new bizz in EU and China Bankruptcies are reaching 500 pr. month Old and young employees are vulnerable But: Still a need for qualified labour and a potential bottleneck approacing due to aging

11 Economic redundancy procedures A simple process in Denmark Act on early warning, etc. in connection with large-scale redundancies Obligations of the employer Basically limited to informing the Regional Employment Council Job reductions Can take place after 30 days or after 8 weeks if the number of redundancies equal more than 50 % of the workforce and the total number of people employed at the site is at least 100 unless otherwise agreed in a collective or individual agreement

12 Anticipation and management of restructuring Planning for changes in the labour market The Danish Parliament has initiated a number of initiatives in order to limit the damages to the labour market due to the economic crisis. I.Intensified surveillance of the labour market II.More flexible rules for planning of work sharing III.Demand driven job creation (Innovation Incubators, The Growth Foundation, The High Tech Foundation, The Replacement Foundation)

13 Planning for changes in the labour market I. Intensified surveillance of the labour market The Ministry of Employment has supplementet its ongoing monitoring of the labour market with three new indicators, The number of people that have been announced for dismissal The number of vacancies at The number of people in work sharing arrangements Outcome: The three indicators will be published on every three months. The three indicators will contribute to a better and closer monitoring of the labour market both locally, regionally and nationally. The intensified surveillance will provide all actors on the labour market with a better foundation for making the best and most informed decisions. The three indicators were published sincespring 2009.

14 Planning for changes in the labour market II-a. More flexible rules for the planning of work sharing Old rules: The person in question could work for a week and then take a week off, or the person would have to be unoccupied for at least two full days per week. During weeks off, the person receives daily subsistence allowances if he or she is member of an unemployment fund. New rules: This initiative eases the above rules so that the person in question can either take two weeks at work and one week off or two weeks of work followed by two weeks off. Outcome: These more flexible rules will enable more companies to temporarily reduce output without laying off employees in situations of declining demand for corporate products. The initiative went into force on the 30th of March 2009 and will apply for one year.

15 Planning for changes in the labour market II-b. Job rotation arrangements The job rotation scheme is an arrangement where an employer hires unemployed people as temporary workers, while the employer sends the permanent employed to receive further education/training. Due to the economic recession the scheme has been simplified and become permanent. The simplification implies that the target group of employers now is limited to skilled and non-skilled workers. Conclusion: The job rotation scheme is very useful for firms facing restructuring since it provides the firm with the opportunity to re-organise its workers and thereby perform a smooth internal transition of its workers instead of being forced to fire workers. At the same time, job rotation arrangements do also create room for unemployed people on the job market.

16 Planning for changes in the labour market III. Demand driven job creation Example: Fornyelsesfonden (Replacement Foundation) A foundation created in March 2010 with a capital of 100 mio. Euros aimed at restructuring from old industries into new industries. Focus areas: Projects aimed at restructuring in geographical areas with high unemployment rates Green projects replacing old industry Projects aimed at improving innovation within welfare solution Selected projects: Project Zero CO2 neutral housing and industry MARCOD innovation within maritime industries LORC

17 Green restructuring Case: Lindoe Ship Yard Green restructuring

18 Available blue collar workers Total = 2,034 Shared services; required by the new shipyard ~8% Smiths Machine fitters Service Tool makers Pipe fitters Painters ~8% 136 Craftsmen (1) ~48% Available 225 Ship builders New shipyard ~35% 338 Welders Available employees

19 Challenge Challenge: How can you employ 996 highly skilled shipworkers and 547 white collar technicians and engineers in 2011? How can you turn a gigantic ship yard into a new industry? Only limited local industry to absorb

20 Green restructuring Screened segments and sub-segments Did not pass initial screening Project Progress Did not pass quantitative /qualitative assessment Retained for deep analysis Wind power Offshore oil & gas Infrastructure Nacelle assembly Jack-up rigs Fixed platform assembly Semi-sub rigs Railway bridges Harbors RoRo platforms Foot bridges Tower assembly (assembly harbour) Floating platform assembly (FPSO) Small/medium sized bridges Hulls Harbor cranes Platform modules Turbine towers Mega-bridge projects Subsea equipment Offshore foundations Ship repair

21 Solution Needs: Ability to handle heavy steel components Harbour position cranes Skills within surface treatment for offshore location Lean and efficient production set-up Perfect match for Lindoe Ship Yard

22 Solution Solution: Lindoe Offshore Renewable Center Establishment of new industry within renewable energy offshore Market potential in Europe: Design, manufacture, operate 10,000 offshore wind turbines in 2020 Develop and deploy a new technology Create a new industrial sector Create 215,000 jobs in 2020

23 Action Action: Public/private partnership Chairman: Poul Nyrup Rasmussen (Former prime minister) Industry: Vestas, Vattenfall, Dong, Skykon, AP Moller, Danfoss etc. Public: University of Southern Denmark, Ministry of Economics and Business, Windpower Org., Region South etc.

24 Source: Flemming Ipsen, University of Aalborg Thanks for your attention