EurWORK European Observatory of Working Life

Bombardier announces intention to close Manage plant

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Country: 
Belgium
Author: 
Catherine Delbar (IST) & Jurgen Oste (TESA/VUB)

Download article in original language : BE0004309FFR.DOC

At the end of March 2000, the Canadian engineering group Bombardier announced its intention to close the Manage plant in Belgium, currently employing 400 workers. The decision comes at a time when order books are full and the company's financial figures are again positive. The Belgian government and the trade unions, shocked by a development that closely resembles the Renault Vilvoorde affair, hope that the decision is not irrevocable.

The Manage BN Bombardier plant, which makes railroad rolling stock, is located in the province of Hainaut– an economically disadvantaged region in 1994-9, according to EU "Objective 1" criteria (ie with GDP lower than 75% of the EU average). Formerly known as "Brugeoise et Nivelles" (BN), the plant became BN Bombardier Eurorail in 1991, a subsidiary of the Canadian-based group Bombardier Eurorail, which also has operations in France and Germany as well as another Belgian company in Bruges.

In 1999, the company secured an order for 210 double-decker coaches from the Belgian national railways (SNCB/NMBS), declaring that if BN Transport did not obtain the contract, employment at the company would be threatened. At the time, the company issued the following press release: "The total order amounts to BEF 8.5 billion. (...) The 210 double-decker coaches will be made mainly in Belgium, in Bombardier Transport's plants. Deliveries will take place between May 2001 and May 2003. (...) For Bombardier Transport, this order by SNCB/NMBS represents 350 jobs over three years. Together with the 78 trains (including 352 diesel-electric rail cars) ordered recently by the British company Virgin Rail Group, it represents 70% of the company's manufacturing capacity in Belgium."

Closure announced

On 27 March 2000, the company's works council was advised of plans to close the Manage plant.

According to Rik Dobbelaere, vice president of Bombardier Europe, the decision to close the plant arises from a series of concomitant factors, such as an excess level of fixed costs and a fall in prices for rolling stock. The general situation of overcapacity in the European railway market, which leads to harsh competition, and the lack of orders in Belgian territory also weighed in the group's decision to close one of its two Belgian plants. Production at the Manage plant is centred on semi-finished goods and can be moved elsewhere more easily than that of the Bruges site, explaining the choice of Manage for closure. The management explicitly states its intention to mitigate the effects of the collective redundancies, by reassigning workers to other plants in Bruges or in France and making use of the early retirement scheme for some workers.

The announcement came as a complete surprise. There had been no indication of a looming closure in management's recent activity. On the contrary, the tone was optimistic: a public contract had been signed just six months ago, a company publication trumpeted the plant's future prospects, and members attending the February works council meeting discussed investments, hiring and forthcoming orders.

The trade unions reacted swiftly. They decided to occupy the plant, inviting management to leave the premises immediately. Soon after, however, workers went back to their workstations to prevent the unions from carrying the blame for the work stoppage and to honour the order book commitments, in order to demonstrate that the plant should not be closed. Work could not be resumed, however, as management had reportedly blocked computer systems 40 minutes before the closure announcement and the plant was no longer heated or supplied with gas. On 30 March, 1,000 people marched in the streets of Manage. Since then, work in the plant has been resumed.

The political establishment reacted as well. Elio Di Rupo, Minister-President of the Walloon region at the time, declared that he was astonished by the company's announcement: "an enterprise that uses the jobs argument as blackmail and then shows no consideration for its workers after it has obtained the contract is an unworthy enterprise." The Walloon Minister for Economic Affairs, Serge Kubla, was also "very much shocked" by the "brutality" of the decision. The Federal Minister for Transportation, responsible for SNCB/NMBS, recommended to the management of the railways that it should immediately serve notice to BN Bombardier that, by announcing its intention to close the Manage plant, the company risks defaulting on its commitments regarding the manufacturing location of the 210 double-decker coaches ordered by SNCB/NMBS.

The Federal Minister for Employment nominated an official conciliator to facilitate resumption of dialogue between management and workers.

Bombardier Manage: a replica of Renault Vilvoorde?

The press has frequently compared the Bombardier Manage affair with the closure of Renault's Vilvoorde plant in 1997 (EU9703108F). Indeed, there are similarities in several respects: a sudden announcement of the closure of a plant, made by the management of a foreign multinational, on the grounds of overcapacity in the industry.

However, there are also differences between the two cases, the most important of which pertains to the closure procedure. In Renault's case, the announcement failed to respect mandatory procedures for the consultation of workers in case of collective redundancies, leading to two judicial proceedings (EU9704118F):

  • a first lawsuit, at the initiative of an employee of Renault Belgium, was referred to the Brussels Labour Court in summary procedure, with a view to obtaining a freeze of the collective redundancies consequent to the closure until such time as workers' representatives were informed and consulted according to the regulations in force (BE9704208N); and
  • a second, at the initiative of the Renault European Works Council (EWC), was referred to the Higher Court of Nanterre, France, with a view to enjoining Renault's management to apply without delay the procedure for the information and consultation of the EWC in accordance with contractual and EU legislative provisions (see "Un an après l'affaire Renault : la nouvelle loi sur les licenciements collectifs", Ph De Keyser, in Journal des Procès, 3 April 1998).

Although successful, these actions had only symbolic impact. Ultimately, Renault applied the consultation procedures, negotiated and concluded a "social plan" and proceeded to close the plant as originally scheduled. Renault's president Louis Schweitzer was fined BEF 10 million for non-respect of various provisions pertaining to the information and consultation of workers in the event of closure and collective redundancies.

In the wake of the Renault Vilvoorde affair, Belgium adopted a law (which has since been dubbed the "Renault law") laying down penalties in case of non-respect of mandatory steps for the announcement of collective redundancies. These steps are as follows:

  • the employer envisaging a collective redundancy must inform and consult the representatives of workers beforehand. Information and consultation must take place before the decision is made;
  • the employer must provide proof that the works council was convened in respect of the intention to proceed to a collective redundancy;
  • the employer must allow the representatives of workers within the works council the opportunity to ask questions about the envisaged collective redundancy, to formulate arguments and make counter-proposals; and
  • the employer must examine the questions, arguments and counter-proposals, answer them and provide proof that they have been answered.

In the case of BN Bombardier, the management did announce its intention to close the plant rather than the actual closure. The procedure is thus in accordance with the "Renault law", which prescribes a notice period between the announcement of a closure and the sending out of redundancy notices.

Commentary

"If you try to think with the heads of Bombardier's management, over there in Canada, (...) you may, like them, conclude that there is no logic, when you are employing 56,000 workers (...) in maintaining three manufacturing plants staffed by a few hundred workers in a pocket-sized territory, a narrow strip of Belgo-French land. It is thus possible to understand the reasons for the closure of Manage, but the way it was done is inadmissible." The Bombardier Manage affair was described thus by Béatrice Delvaux in an editorial in the Belgian daily newspaper Le Soir on 30 March 2000.

What shocked many observers in this affair is the perceived duplicity shown by the company's management: Bombardier used the jobs threat to win a public contract, reassured its workers by distributing an optimistic company publication and asked workers for more flexibility and additional productivity efforts, while at the same time several elements would indicate that the closure was premeditated. Hence, even if work were to resume at Manage (which is far from certain), the workers can be seen to have been duped. How can working together be envisaged in future?

At present, the plant's workers and their representatives have a period of time allowing them to formulate alternatives to the closure decision, but there is precious little room for manoeuvre in negotiations. To put forward credible counter-proposals, they would need the wherewithal to conduct a full-scale expert review, whereas all they have is the information provided by management. Trade union action at the level of the group represents another hopeful avenue, although the unions are aware that there is pressure on workers in the other plants as well. (Catherine Delbar, Institut des Sciences du Travail/UCL and Jürgen Oste, TESA/VUB)