The European Shipbuilding Industry Bright present, anticipating uncertain future 16 November 2006, Turku Managing cyclical changes in the European shipbuilding and ship repairing industries: Evidence from across Europe Xabier Irastorza Research Officer European Foundation for the Improvement of Living and Working Conditions 30/04/2019

Study Dates Research Team Countries covered January – March 2006 National reports: National Experts Consolidated report: EMCC Countries covered Denmark France Germany Italy Malta Poland Portugal Spain The Netherlands United Kingdom 30/04/2019

Content Introduction Measures to deal with cyclical fluctuations in demand Effectiveness of the various measures Conclusions 30/04/2019

Introduction Shipbuilding and ship repairing: Cyclical fluctuations in demand: intrinsic characteristic. Inflexible production and service capacities. Essential for European industries to: Increase capacity to react flexibly. Retain access to highly qualified workforce. Crucial to find mechanisms to deal with cyclical changes in demand in a socially responsible way 30/04/2019

Content Introduction Measures to deal with cyclical fluctuations in demand Effectiveness of the various measures Conclusions 30/04/2019

Measures to deal with cyclical fluctuations in demand (1) Goal Adapt rapidly to changing market conditions. Focus of report Identify/analyse solutions aimed at: Increasing the companies’ internal flexibility. Retaining access to a well-trained workforce. Caution Transferability Types of measures Aspects to be taken into account Working time arrangements Changes in work organisation Financial concession and support Nature of cycle: short vs. long., downswing vs. upswing. Temporary vs. permanent measures. Measures used in combination. 30/04/2019

Measures to deal with cyclical fluctuations in demand (2) Working time arrangements Goal Adapt volume of labour to demand variations through flexible distribution of working hours. Tools Overtime/short-time. Working time accounts. Differences Overtime/short-time more complicated for employers: bureaucratic application, overtime pay. Working time accounts: reduce wage bill / same flexibility. Use Uneven distribution across Europe. No differences in use between two industries. Work organisation measures more widely used. 30/04/2019

Measures to deal with cyclical fluctuations in demand (3) Changes in work organisation (1) Quantitative adjustment of workforce size to cyclical fluctuations Outsourcing and subcontracting Use of temporary workers and fixed-term contracts Secondment schemes and staff pools Qualitative adaptation of workers to cyclical changes by fostering their polyvalence (internal functional flexibility) Training initiatives 30/04/2019

Measures to deal with cyclical fluctuations in demand (4) Changes in work organisation (2) Outsourcing and subcontracting Focus on core competencies and respond to rigid regulatory framework Goal Reduce fixed personnel costs. Externalise risk of cyclical fluctuations. Main reasons Technological justification. Shifts in volume. Cost. Consequences Increased flexibility / reduced fixed labour costs. Coordination / loss of knowledge and skills. Use No clear pattern. 30/04/2019

Measures to deal with cyclical fluctuations in demand (5) Changes in work organisation (3) Use of temporary workers and fixed-term contracts Increased flexibility while minimising costs due to reduced permanent staff Temporary workers Usually employed by an employment agency. Fixed-term contracts Directly by company for specified period of time. Consequences Employer: lower wages and fringe benefits than permanent staff / same problems as outsourcing. Employee: dramatic decrease in employment security. Use More common among SMEs, ship repairing and subcontractors SIZE consideration 30/04/2019

Measures to deal with cyclical fluctuations in demand (6) Changes in work organisation (4) Secondment schemes and staff pools Flexible adjustment within core workforce: company-internal and inter-company Retain highly skilled workers ‘Adjusted’ skilled workforce to demand peaks/lows. Split workforce cost among employers Advantage for employers Advantage for employees Employment and income security Sporadic. Germany, The Netherlands (Deltametaal). Shipbuilding vs. ship repairing. Use 30/04/2019

Measures to deal with cyclical fluctuations in demand (7) Changes in work organisation (5) Training initiatives Improve workers’ capacity to adapt qualitatively to cyclical changes Additional function Attract new people to the industry Relevance for industry Long adaptation period of young workers Shortage of skilled labour in both industries: employment cuts / ageing Production cycle of shipbuilding Country-specific and company-specific measures. Cooperation with education centres/public authorities. Use 30/04/2019

Measures to deal with cyclical fluctuations in demand (8) Financial concession and support Financial measures aimed at managing periods of weak demand: Examples from several countries. Public Income Support Company specific agreements Temporary cost reductions and increase in working time flexibility. Employment security. 30/04/2019

Measures to deal with cyclical fluctuations in demand (9) Summary Working time arrangements Overtime/short-time work. Working time accounts. Changes in work organisation Quantitative adjustment: Outsourcing and subcontracting. Temporary workers/fixed-term contracts. Secondment schemes and staff pools. Qualitative adaptation: Training initiatives. Financial concession and support Public income support. Company specific agreements. 30/04/2019

Content Introduction Measures to deal with cyclical fluctuations in demand Effectiveness of the various measures Conclusions 30/04/2019

Effectiveness of the various measures Heavily dependant on country and company-specific conditions. Choice and effectiveness Key role of training: In-house. State-provided institutional framework: essential for smaller enterprises. Important framework conditions: Legal and institutional context and traditional patterns of industrial relations. Structure of industries: concentration and specialisation. 30/04/2019

Content Introduction Measures to deal with cyclical fluctuations in demand Effectiveness of the various measures Conclusions 30/04/2019

Main conclusions (1) Key factor Size more than sector (shipbuilding vs. ship repairing) Outsourcing and subcontracting, coupled with: Technical measures. More flexible use of own workforce. Preferred method Burden of cyclical fluctuations shifted to smaller subcontractors. Greater precarious employment (temporary and fixed-term contracts). Smaller companies 30/04/2019

Main conclusions (2) No best way to deal with cyclical fluctuations in demand. Tools Dependant on country specific constraints, legal and institutional context and tradition of industrial relations. Outcomes Dependant on perception/strategies of social partners and the nature of their interaction. Willingness to cooperate essential. Role of the State. Role of three actors in achieving increased flexibility while ensuring employment security at the same time. 30/04/2019

Thank you for your attention! www.emcc.eurofound.europa.eu European Monitoring Centre on Change 30/04/2019