Social partners seek solutions to crisis in textiles and footwear industries

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In summer 2002, the Portuguese textiles and footwear industries are facing a crisis, with large numbers of company closures and relocations and many job losses. The sector's social partners , and especially trade unions, are demanding local, regional and national solutions from the government.

In summer 2002, the textiles and footwear industries in the northern and central regions of Portugal are facing a crisis, owing to falling orders, fierce competition from Asian countries, and the relocation of companies to countries where labour is cheaper, such as eastern Europe (PT0111101N). Some companies have folded and data published by the Institute of Employment and Vocational Training (Instituto de Emprego e Formação Profissional, IEFP) indicate that thousands of workers in Castelo Branco, Guarda, Covilhã, Seia, Sertã and Pinhel have lost their jobs, with many going back to working the land. The crisis in the textiles industry has mainly affected women.

One of the most high-profile recent closures is that of Eres, a Swiss-based multinational which has had a factory in Fundão for over 30 years, providing work for 5% of the employees in this municipality. The company's Portuguese operation has gone into liquidation and the plant has been moved to Bulgaria, leaving 483 women out of work.

In response to the crisis, he Regional Trade Union Federation of Castelo Branco (União dos Sindicatos do Distrito de Castelo Branco, USDCB) has submitted several proposals to the Portuguese government and called for an emergency plan for the textiles industry, involving:

• the creation of a zero-interest line of credit for the sector;
• a diagnostic study to identify what is causing the current problems of textiles and footwear companies and suggest solutions;
• audits of companies that have received public financial support to check on the results achieved with the funding;
• audits of companies with debts to the social security system, the tax authorities and their employees;
• a vocational training plan for entrepreneurs, management and workers;
• measures to guarantee that no premises licensed for manufacturing can be used for any other purpose without the factory and its workers being transferred to other premises; and
• the promotion by the government of an economic policy that favours an increase in consumption, acting in collaboration with the European Union to revitalise the domestic market and control the current fierce competition.

More broadly, trade unions in Galicia, Spain, and northern Portugal have proposed the creation of a cross-border observatory to conduct studies forecasting the needs of the area's labour market and providing the appropriate response in terms of vocational training.

In response to the plight of the redundant Eres workers, and faced with the imminent loss of 1,500 jobs in the area, the mayor of Fundão has promised to urge the government to take exceptional measures to reactivate and strengthen the textiles industry, and has appealed for local and EU measures to counter this type of company liquidation. It is claimed that competition and the aggressive nature of the market oblige manufacturers to seek locations where there is cheap labour, incentives or tax exemptions, and when these incentives end, they simply close their factory and move to another country.

The Integrated Innovation Support Programme (Programa Integrado de Apoio à Inovação, Proinov) (PT0106150N) has called for the creation of a fashion 'megacluster', including textiles, footwear and leather goods, which would help speed up the transition to an innovative knowledge-based economy in Portugal.

The textiles sector's industrial associations have been trying to counter the negative factors facing the industry, while central associations such as the Association of Portuguese Industry (Associação Industrial Portuguesa, AIP) and Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) and representatives of foreign investors, such as the German Chamber of Commerce and Industry, having been taking steps to try and remedy the situation in Portugal.