Société Pour Le Développement De L’Industrie Et De L’Emploi
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2/1/2016 Linking Local Actors 209-SODIE-v6 • venture capital • corporate social responsibility • unemployed • deprived areas • urban areas An initiative in the Belgian town of Liège is on track to replace the 2,700 jobs lost in a steelworks closure. Social partners join forces to replace lost jobs The world’s biggest steelmaker and the trade unions are the main investors in economic development consultancy SODIE Belgium. SODIE has accepted the task of replacing the 2,700 jobs lost in the closure of the renowned Cockerill-Sambre steelworks in Seraing, near Liège. SODIE backs up its business planning advice by making unsecured loans that new firms can use to provide working capital and make intangible investments. At the halfway stage, the project is on track to meet its target. The area of Liège, in eastern Bel- gium, is one of the world’s oldest coal and steel producing areas, with the first ironworks opening in Seraing on the river Sambre in 1809. John Cockerill introduced blast furnaces to the area, an economic asset that formed the basis for other heavy industries such as railway engines and armaments. Nearly two centuries later, in the early 1980s, the steel industry, along with other traditional sectors such as glass, shipbuilding, coal and textiles, entered a long period of crisis, against a back- ground of worldwide technological An aerial view of the Arcelor Mittal change. Despite significant state steelworks at Seraing © Vincent Maurin support at both national and regional levels, the works could not compete. At the end of the 1990s, the Belgian government asked French steelmaker Usinor to take over the management of Cockerill-Sambre, which employed 10,000 people in the Liège area. After the externalisation of many activities, a new company called Arcelor was born in 2002 from the merger of Arbed, Usinor, Eko-Stahl and Aceralia. A year later it announced that steelmaking in Liège was to end, with the loss of 2,700 jobs by 2006. Restructuring plan This decision was a heavy blow for the region. At the time of the announcement, unemployment in the region was already running at 22%, and the Arcelor closure would boost it to 26%. Negotiations among the local authorities, the Walloon region and the unions resulted in a postponement of the initial closure deadline by two years to 2009, and a plan was devised which aimed to involve the company in the region’s revival. The long history of the steel industry in the region and the fact that the public authorities had held shares in the company since the 1980s were key arguments in the region’s favour. A global restructuring plan was then negotiated among the company, the trade unions and the local and regional authorities. The negotiators aimed to achieve zero dismissals, by combining early retirement, reclassification, training and support for business start- ups. As the average age of Arcelor’s employees – 44 years – is quite high, most of them will be offered early retirement. This means that in terms of local development, the problem is more about the lack of economic activity than just the loss of jobs. For the younger workers, one of the proposed solutions is mobility inside the company. But very few have chosen this solution, preferring to stay in the Liège region, partly for language reasons. The business start-up option was put in the hands of SODIE – la Société pour le Développement de l’Industrie et de l’Emploi. Meanwhile in 2006 Arcelor merged with Mittal Steel to form the world’s biggest steelmaker. SODIE – a partnership institution SODIE Belgium was founded in 1999, as a subsidiary of the French company of the same name, which is 55% owned by the Alpha Group and 45% by Arcelor. Like its French parent, its principal roles are to advise employee representatives in their role in works councils, and to promote economic development. In France, a major client is one of the country’s largest trade unions, the Confédération Générale du Travail (CGT). Arcelor was already working with SODIE in France, and so asked its Belgian branch to support new small companies and projects in the Liège region with the objective of creating, by 2009, 2,700 jobs, to replace those lost in the steelworks closure. Work began in 2004 with a budget from Arcelor of €20 million. The assistance SODIE offers covers the whole of Liège province, as well as some neighbouring municipalities. It consists of supporting the creation of a business plan and in lending the necessary start-up capital on affordable terms, and without security. For its part, the client enterprise undertakes to create at least five jobs within three years – and these jobs do not have to be taken by ex-Arcelor workers. SODIE has helped conventional companies and co-operatives, mostly in the service sector. Loans are advanced in two or three tranches, depending how big it is, at an interest rate of between 3.5% and 4.25%. The average size is about €7,000 per job created, and the duration 5-7 years. “We are not trying to compete with the banks, but to complement what they do,” says Philippe Falla, director of SODIE Belgium. ”Because we don’t insist on security for our loans, we can finance working capital and intangible investments like R&D and marketing.” SODIE sometimes intervenes at the demand of a private bank which wants to share the risk. SODIE’s four experts don’t wait for people to knock on their door, but go out actively looking for projects. By August 2006, the team had created 350 actual jobs, with a further 550 projected – and by April 2007 the projected total had risen to 1,400. Of these, 55% are of a manual and 45% of a clerical nature. However the unions soon began to question the quality and quantity of the new jobs being created. SODIE does monitor the progress of the companies it helps, and has had to re-examine several cases. One problem is that most of those who are looking for a job are the least trained, and so some small firms are reluctant to engage them. The better-qualified technicians, who 2 209-SODIE-v6 could play a useful role in many good projects, are easily reabsorbed within Arcelor Mittal, and so rarely emerge into the labour market. Building a network Another of SODIE’s jobs is to attract foreign investors to the region. It has made an agreement with the regional property investment company, and organised a mission to Flemish industrialists, to sell industrial property at a better price than that available in Flanders. SODIE is in a constant dialogue with the Walloon region’s public investment company, SOWALFIN, so as to remain complementary to it and to the private banks. It also meets with the trade unions every three months. At the beginning, they were unenthusiastic, as they doubted the quality of the jobs being created, but they have been won over to some degree. One union, the CSC, has a collaborative attitude and sends projects to SODIE, while the other, the FGTB, has moderated its criticism while remaining reluctant. Partnership is key to the SODIE project. Its success relies on the close links between SODIE, Arcelor Mittal, the private banks and the public investment companies. Links Groupe Alpha: www.groupe-alpha.com Arcelor Mittal: www.arcelormittal.com Contact: Philippe Falla SODIE Belgique Rue Sainte Marie 5 4000 Liège Belgium Tel: +32 4 224 65 37 Fax: +32 4 224 13 76 E-mail: [email protected] Website: http://www.sodie.be 3 209-SODIE-v6 .