Industriall Europe Sector Committee on Mechanical Engineering

Mechanical Engineering Sector Committee Condensed minutes of meeting 04-Nov-2014 - DRAFT

industriAll Europe Sector Committee on Mechanical Engineering Luxembourg, 4th November 2014 Condensed minutes - DRAFT

Venue European Commission, Jean Monnet Building, Luxembourg

Participants: See Appendix 1 The meeting was chaired by the Chairman of the Mechanical Engineering Committee, Dominique Ghiglione (FGMM-CFDT). The meeting was supported by the slides listed in Appendix 2.

Executive summary of main points  The proposed Policy Brief on “Open standards for the digital integration of manufacturing” was discussed and would be adopted following formal consultation procedures on the revised version of this document, which incorporated the remarks made during the meeting.

 The proposal for a project on “Sustainability policies and skills in the Machine tools & Robotics sector” was submitted to DG EMPL in August 2014, for financing under the “Support for Social Dialogue” budget line.

 The Sector Committee on Mechanical Engineering would continue its work on Disassembling / De-Manufacturing technologies.

Qualitative review of industrial situation of the sector Laurent Zibell (industriAll Europe) presented a quantitative overview of the European Mechanical Engineering sector, based upon the quantitative data from Eurostat on employment, production, productivity, unit labour costs, investment, education, R&D and energy efficiency (see attached slides). Aleksandar Zuza (IFMetall): In Sweden, nothing much was happening in the sector. No investment. Slow decline. Gerald Kreuzer (PRO-GE) and Rudolf Wagner (GPA DJP): The economic situation in Austria was acceptable, but deteriorating, because demand in export markets (specifically in the European Union) was decreasing. Salary increases were being consumed by higher income taxes. Mika Kärkkäinen (Metalli), Ira Laitakari-Svärd (IL ry) and Katariina Stoor (PRO): The Finnish GDP was stagnating, exports had fallen by 10% in one year, and the turnover of the Mechanical Engineering sector (NACE code 28) had declined by 6% over the period from January – July 2014, while exports

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had fallen by 8%. There was a plan to raise the pension age to 65 years. Threats concerning the right to strike were a big concern. Alvaro Garrido-Romero (CC.OO. de Industria): Spain had experienced 5 quarters of growth, but this timid recovery was being used to pay back the debt. No investment was taking place. Unemployment rates remained very high (25% in general, 50% for youth). Statistics on wages were becoming unreliable, because the new labour law allowed firms the right not to apply collective agreements. André Legault (CFE-CGC Métallurgie) and Dominique Ghiglione (CFDT FGMM): The economic situation in France was mediocre, with stagnation and persistently high unemployment. The government was engaged in a “Responsibility pact”, offering tax breaks for firms in exchange for commitments to recruit. It was negotiated at sector level. In the metalworking branch, the situation was varied. Gaizka Motte dit Falisse (ACV/CSC METEA): The situation of the sector in Belgium was determined by the working time reduction at Caterpillar, and by the closure of the Dosan site.

Project on the impact of sustainability policies on employment & skills in the Machine tools & Robotics sector Laurent Zibell (industriAll Europe) reported on the final version of our proposal to DG EMPL, Support to Social Dialogue, with employers’ association CEEMET as associate and industry associations CECIMO and EUnited Robotics as co-applicants. An answer is expected from the Commission in January 2015.

Conference by IndustriALL Global Union on the Lifts & Escalators sector Gerald Kreuzer (PRO-GE) spoke about a conference which would be held in Vienna (Austria) on 11 th and 12th November 2014, as a follow-up to the one held in Geneva in 2013. The conference would mainly discuss:  The developments of Global Framework Agreements with KONE and ThyssenKrupp

 Occupational Health & Safety

 Recent industrial policy developments in the sector (95,000 employees in Europe in 2011).

André Legault (CFE-CGC Métallurgie): At KONE, workers supported the signing of a Global Framework Agreement, specifically on the respect of ILO core standards. There were varying levels of compliance with the European safety standards for workers in the lift maintenance sector.

Advanced Manufacturing Technologies Bonifacio Garcia Porras, Head of the Unit “Innovation policy for growth”, European Commission, DG ENTR, reported on the activities of the Task Force on Advanced Manufacturing Technologies, based on the attached presentation. The mission of the Task Force is based on the following trends in European manufacturing:

 Scarcity of raw materials, energy and skills

 Big data

 Mass customisation.

In 2014, the Task Force published a first report outlining short-term recommendations:  Facilitate the commercialisation of Advanced Manufacturing technologies, e.g. through demonstrators

 Remove obstacles to demand, e.g. through financing

 Improve skills and organisations, e.g. through workplace innovations.

The next stages of the policy were currently under discussion and would involve, in addition to the above items:

 Coordinating national strategies in the field (e.g. Industrie 4.0 – DE; High Value Manufacturing Catapult – UK; Smart Industry Initiative – NL)

 Raising awareness in the general public (e.g. Open Day of Industry in Europe)

 Training the trainers, who would give technical support for the uptake of new technologies by SMEs

 Setting up a permanent Policy Group on manufacturing, including Member States and trade unions.

Participants underlined the generally pessimistic climate of European manufacturing, and the need to revert it, specifically by creating demand for sophisticated customers who drive innovation, and by supporting investment by manufacturing firms. Gerald Kreuzer (PRO-GE) and Dominique Ghiglione (CFDT FGMM): There should be better communication regarding the programme for Advanced Manufacturing as an opportunity for workers.

14:00 – 15:00 Policy paper on open and interoperable Machine-to- Machine communication standards In Advanced Manufacturing, the sector’s value added risked being captured by proprietary communication standards and data formats owned by US software corporations, meaning that the possibility for European manufacturers to invest, expand and innovate would be jeopardised, with severe consequences for workers in the sector. Laurent Zibell (industriAll Europe) presented a draft Policy Brief demanding open and interoperable Machine-to-Machine communication standards (attached).

Mika Kärkkäinen (Metalli): The proposal to set up an open standard seemed highly pertinent. One needed to ensure that the “de jure” standard was also the “de facto” one. Advanced manufacturing would require the standardisation of health & safety, and of privacy at work. Alvaro Garrido-Romero (CC.OO. de Industria): The policy should be separated into two steps: (1) to make the open standard exist as an alternative to proprietary solutions, (2) if necessary, to make this standard mandatory. This second step appeared to be difficult. Rudolf Wagner (GPA DJP) expressed his support for the standard to be made mandatory. The same problem already existed with SAP software: the data was closed off and inaccessible. This proposal for an open standard was innovative. Dominique Ghiglione (CFDT FGMM): Manufacturers in the Mechanical Engineering sector needed this standard now, in order for the following entities to be able to communicate:  CAD/CAM software

 Processing machines

 Quality Assurance and dimension control instruments

 Company management software.

There is a risk of being taken over by an easy-to-use, global software package. Trade unions needed to exert pressure, today, to avoid our factories being remotely monitored by other players. Conclusion : The proposed Policy Brief would be amended following the observations made, and the revised version would be submitted to a formal written consultation procedure.

15:00 – 16:00 Prospects of de-manufacturing technologies The efficient and targeted disassembly of products having reached their end of life could lead to the high-performance re-use, remanufacturing and recycling of strategic raw materials and components, thereby reducing waste generation and pollution. Such technical developments could have a strong, positive impact on employment. They could also impact the technologies and institutions to be developed to equip such “demanufacturing” factories: reverse logistic flows, sensors, automated testing systems. Dominique Ghiglione (CFDT FGMM) presented the attached slides to introduce the discussion on whether specific action at EU level could be engaged to support such developments with potentially positive environmental and social effects. A product’s end of life could lead to: (1) having it re-used by another person (even in another setting); (2) replacing / rejuvenating some components and updating its performance (i.e. “retrofit”); (3) repairing it; (4) disassembling it to recover valuable modules or raw materials. This theme is important for trade unions, because disassembly / demanufacturing can create new jobs in local plants. It can reconcile environmental and employment concerns. Gerald Kreuzer (PRO-GE), Klaus Topf (GPA DJP) and Aleksandar Zuza (IFMetall): This was a huge opportunity – albeit not an easy one. Europe has no raw materials: this technology would give us International Trade Union House (ITUH) - Boulevard du Roi Albert II 5 (bte 10) - B-1210 Brussels Tel: +32 2 226 0050 [email protected] www.industriall-europe.eu November – 2014 4 Mechanical Engineering Sector Committee Condensed minutes of meeting 04-Nov-2014 - DRAFT

access to some. Lengthening the life of a product reduced its environmental footprint. Demanufacturing could lead to new industrial jobs in Europe. Trade unions should address this topic, in cooperation with our colleagues from the waste management services. Mika Kärkkäinen (Metalli) and André Legault (CFE-CGC Métallurgie): Disassembly covered circular economy and industrial symbiosis: it could be a good idea. We should perform a proper economic assessment of the impacts on competitiveness and employment. Would it be an economically viable business? Alvaro Garrido-Romero (CC.OO. de Industria): End-of-life products were often (illegally) exported in the global South as second-hand products. Organised crime was a risk in this sector of recycling. Conclusion : The Sector Committee Mechanical Engineering would continue to discuss the topic of Disassembly / Demanufacturing, taking into consideration its economic effects and inviting colleagues of the waste management services sector (UNI Europa) to participate in this discussion.

16:00 – 16:30 Protection against LBOs Leveraged Buy-Outs (LBOs) can have a destructive effect on the (generally medium-sized, family- owned) firms in the sector, by forcing the firms to generate high and rigid financial returns to pay for the debt of the holding that acquired them. This short-term orientation with no consideration for the cyclical nature of the business in the Mechanical Engineering sector, often leads to firms having their productive and innovative capital “burnt” to meet the requirements of the owners’ creditors – at the detriment of the workers. Laurent Zibell (industriAll Europe) presented slides (attached) on potential means to protect firms against the most destructive effects of LBOs. Aleksandar Zuza (IFMetall): In Sweden, the view regarding private equity shareholders was that they behaved in a way that made both industrial and economic sense (often more so than the multinationals): no dismissals, no sacrifice of R&D or of investment, long-term orientation, only selling off minor parts of companies, workers were well listened to and new, proficient managers were brought on board. Regulating LBOs was difficult, because credits were provided by foreign banks – and the funds themselves were often based in tax havens. Other issues were of higher importance: tax secrecy, tax havens. Mika Kärkkäinen (Metalli): LBOs were a problem if the debt was placed on the company itself. Often, LBO funds were welcome to take over companies when the manager retired. Gerald Kreuzer (PRO-GE): The topic of LBOs should be proposed to the industriAll Europe Industrial Policy Committee. It was not specific enough to Mechanical Engineering.

Appendix 1: List of participants

INDUSTRIALL Laurent Zibell industriAll Europe BENELUX REGION BELGIUM

Gaizka Motte Dit Falisse ACV/CSC METEA Jean- François Amistadi ACV/CSC CNE CENTRAL REGION AUSTRIA Gerald Kreuzer PRO-GE Klaus Topf GPA DJP Rudolf Wagner GPA DJP NORDIC-BALTIC REGION FINLAND Ira Laitakari-Svärd IL ry Katariina Stoor PRO Mika Kärkkäinen Metalli SWEDEN Aleksandar Zuza IFMETALL SOUTH WEST REGION FRANCE André Legault CFE-CGC Métallurgie Dominique Ghiglione CFDT FGMM SPAIN Alvaro Garrido-Romero CC.OO. de Industria

External speaker: Bonifacio Garcia Porras, Head of the Unit “Innovation policy for growth”, European Commission, DG ENTR

Appendix 2: List of attached documents  industriAll Europe: Economic and Industrial indicators

 European Commission, DG ENTR: Uptake of Advanced Manufacturing products and technologies

 FGMM-CFDT: Perspectives des technologies de dé-production

 industriAll Europe: Leveraged Buy-Outs (LBOs), a concern for European Mechanical Engineering?

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