Youths left broken on wheel of fortune

General Motors is one of the few big international companies to make a financial commitment to Europe where youth unemployment is rife.

The headquarters of Opel. AFP

The dark clouds of unemployment have gathered so heavily in recent times even the most upbeat pronouncements on the labour front are often marred by a gloomier subtext.

So it was last month when the motor manufacturing giant General Motors (GM), the owner of Opel among others, offered encouraging words to workers in two European towns nearly 1,900km apart.

This welcome boost for the economies of Ellesmere Port, on the Manchester ship canal in north-west England, and Gliwice, in the southern Polish region of Upper Silesia, was coupled with a bombshell for a third town located somewhere between the two.

But first the good news. Announcing future plans for production of its Astra models, GM said investments in the region of €155 million (Dh707.54m) would be made at the British and Polish factories.

After an agonising wait for GM to declare its hand, against an ominous background of huge losses on European operations - US$747 million (Dh2.74bn) last year - and a string of job cuts, there was relief and even jubilation in both areas, neither any stranger to the ravages of industrial decline.

So far, so good; in Ellesmere Port, it was just the commitment needed to dispel earlier fears that the factory, producing Opel cars branded Vauxhall in the United Kingdom, was struggling to stay open at all.

A somewhat different mood was to be found among the workforce at GM's factory at Rüsselsheim, western Germany, birthplace of Adam Opel, who founded the company that went on to produce cars after his death.

Expansion in Britain and Poland was to take place at Germany's expense; one of the country's best-selling cars would no longer be produced within its borders.

Those in the know were hardly surprised. Wolfgang Schäfer-Klug, the leader of the factory's works council, has spoken beforehand of the possibility that GM was about to make a "wrong decision of catastrophic proportions".

But with industry observers predicting a European plant closure, the announcement raises concerns about thousands of German jobs.

Union leaders believe Rüsselsheim, as Opel headquarters, would probably be spared by the transfer of other work, but that this would put the survival of another factory, at Bochum, in jeopardy. Bochum produces the Zafira minivan but is the oldest and least efficient of Opel's four German plants, and GM has made no commitment beyond the end of 2014.

Many must now be pondering the value of being citizens of a country routinely held up for the admiration of the world, and especially the rest of Europe, as a model of financial rigour and economic resilience.

But at least there were winners as well as losers in this single example of the social impact of a major multinational's corporate strategy in troubled times for industry.

A few days earlier, the UN's International Labour Organization (ILO) had highlighted generally downbeat employment trends with a report showing 75 million young people to be out of work around the world. This represents 13 per cent of 15 to 24-year-olds available for employment, slightly down on the 2009 peak but with little hope of further improvement for the next four years.

The ILO said many young jobseekers were being forced to forget their skills and qualifications and settle for unskilled or part-time work. More than six million were described as so disillusioned that they had stop even looking for employment.

If it seems relatively unusual for Germany to suffer the effects of a recession that has hit Europe so badly, it is worth remembering discontent about the effects of austerity policies was recently sufficient to inflict a severe electoral reverse on the chancellor Angela Merkel.

Her conservative Christian Democrats were trounced by the left in elections in the North-Rhine Westphalia region, where voters often reflect public opinion nationally.

Spain's unemployment rate, already disturbingly high at 24 per cent of adults, exceeds 50 per cent among the young.

Despite tough measures by the relatively new right-wing government, the crisis continues to grow; stocks slumped to a nine-year low on May 29, the Catalonia region has appealed for emergency help, bond interest rates have been raised and European authorities are seeking remedies for the debt-ridden banking sector. Some analysts depict Spain as having sunk into depression. "So we see that Spain has now slipped into the economic morass that created such destruction in Greece,'' said Shaun Richards at the investment website mindfulmoney.co.uk.

"We also see familiar echoes of past problems in other countries as Spain repeats the Irish tactic of sticking its head in the sand like an ostrich as its banking sector weakens.''

In France, a wave of redundancies - and concern that many more jobs are at risk - has led to talk of a "murderous summer'' for employment, to quote a phrase used by the weekly Journal du Dimanche.

The newspaper said all industrial sectors were affected, from energy, car-making and metallurgy to services, distribution and telecommunications.

It is tempting for the French left to protest that bosses are making ordinary people pay for voting a socialist into the Elysée - the new president François Hollande's government is planning measures to prevent cuts driven purely by market interests.

But the 93,000 jobs identified in a trade union report as being at immediate or short-term risk came to light throughout the period from January to last month.

France did not elect Mr Hollande in place of the centre-right Nicolas Sarkozy, more favoured by employers, until May 6. And Mr Hollande is quickly learning the realities of economic life.

Arnaud Montebourg, who holds the ambitious title of minister of industrial recovery, said while visiting the Fralib factory, a Unilever subsidiary at Gémenos, near Marseille, producing Elephant brand herbal teas, there would be no government support for unviable businesses.

"We cannot afford it," he told Journal du Dimanche. "And it would not be recovery but evading the issue." Fralib, where 103 workers facing dismissal have staged occupations of the plant, is said to be profitable; Unilever reportedly believes it would be more so if relocated to Poland. How Mr Hollande can prevent companies looking around for cheaper, more flexible labour remains to be seen.

German politicians supporting the car workers of Rüsselsheim and Bochum say GM has been playing its European sites off against each other. But car manufacture is scarcely the first industry where labour forces have had to make the choice, in effect, between eliminating long-established but rigid working procedures and the dole queue. German workers, too, offered concessions in an effort to keep Astra production.

Had GM closed the Vauxhall works at Ellesmere Port, 2,100 jobs would have disappeared, not to mention the knock-on effects. The BBC reported Duncan Aldred, the Vauxhall chairman, as saying the "groundbreaking, historic day" would instead create 700 new posts directly and up to 3,000 more in the supply chain.

In return, Vauxhall workers voted with a thumping majority - all but 6 per cent in favour - to accept a four-year deal covering pay and conditions and enabling the plant to work 24 hours a day, 51 weeks a year, if necessary.

"This is a success for team working," said Vincent Cable, the British government's business secretary. "We have had business, unions and government working together in a very productive partnership."

As it scrutinises the approach of individual governments, the ILO is calling for more training schemes, tax breaks and other government measures to encourage recruitment.

But even those proposals have the appearance of good intentions that mean little until action begins to accompany the words.

Few are under any illusion about the scale of the task confronting those, such as Mr Hollande, demanding bold measures to encourage growth and break free from reliance on belt-tightening alone to rescue enfeebled European economies. And young job-seekers seem destined to go on paying the price if governments fail to deliver.

"The youth unemployment crisis can be beaten," said Jose Manuel Salazar-Xirinachs, the executive director of the ILO's employment sector. "But only if job creation … becomes a key priority in policymaking and private sector investment picks up significantly."

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