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World of Work:
World Labor
News Roundup

From Jeff Apter In Paris
Special to

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Months of speculation over the proposed marriage between General Electric and Honeywell have ended with the engagement being called off. The tie-up, which would have led to the world’s biggest industrial take-over, is not to be following a decision by the European Union to block it. It was also rumored that GE previously was losing interest in the merger plan.

Mario Monti, responsible for competition questions for the 15-member EU, said the $42 billion tie-up between GE and Honeywell would have created an "unhealthy dominant aerospace giant." Monti said the companies, who signed the merger agreement last October, had made too few concessions and too late. A merged entity would have had an overwhelmingly dominant position in the multi-billion dollar market for jet engines and avionics which would have severely reduced competition, Monti said.

It is the first time that the EU has killed off a merger of two American-based companies that had already been approved by the U.S. authorities. GE Chairman Jack Welch, who had put off his retirement until the end of the year to finalize the merger, said he is to step down in September.

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The 44th Paris Air Show, which took place at the French capital’s Le Bourget business airport in June, was one of the biggest ever and could prove to be one of the most successful for European aerospace jobs.

Airbus, Boeing’s arch rival, signed firm contracts with five customers for 155 aircraft and another 20 options altogether worth an estimated $14 billion, including for the recently launched 555-seat double decker A380 super jumbo. The firm orders it clinched at the Air Show more than double

Airbus’ sales so far this year, with the company’s order book just one short of 300 aircraft.

The Airbus Integrated Company, as it is now called, is owned 20 percent by BAE Systems (formerly British Aerospace) with the other four-fifths belonging to EADS, a Europe-wide company involving France, Germany and Spain. The new orders are expected to secure existing jobs and create new employment opportunities in the European aircraft manufacturing industry as well as among sub-contractors and equipment suppliers.

European employment opportunities will be further enhanced following the signature by six European countries of a Memorandum of Understanding to launch the A400M Airbus military transport aircraft. The six countries committed themselves to order 193 aircraft. The official launch is expected by the end of the year and possibly this fall.

Forty-three countries were represented at this year’s Paris air show, two more than at the previous event in 1999. More than 1,800 exhibitors showed their wares, just under the number represented two years ago, due mainly to the considerable number of mergers in the industry. The U.S. had a major presence. Nearly 250 civil and military aircraft of all shapes and sizes were on show, some making their debut.

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Poland’s president has intervened in a controversial debate over the Polish administration’s policy towards the union movement with a call for changes to the country’s labor code and limits on the unions’ role in the fight against rising unemployment.

President Aleksander Kwasniewski said he supported more rights for business, which is complaining that the unions have too much power. Kwasniewski said he would like to see the position of businessmen strengthened in the legal system and the unions’ role "rationalized."

The Polish congress is considering a package of measures to combat unemployment, which in May rose to almost 16 percent of the workforce. The draft provisions include changes to the labor code, which has strict hiring and firing rules. But the bill faces strong opposition within congress where about one quarter of representatives has been elected to represent Solidarity and the OPZZ, the two labor federations.

In a bid to reduce unemployment, Congress last March reduced the working week from 42 to 40 hours a week. This step was criticized by business, which says the shorter working week will increase wage costs and reduce profits.

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A leading French employment official says the country’s 35-hour week legislation will create up to half a million jobs and reduce the unemployment rate by 1.5 percent.

Henri Rouilleault, the director of ANACT, France’s national agency for the improvement of conditions at work who chairs an important committee responsible for seeing through work time reductions, said the main aim of the law was job creation and to reduce France’s high unemployment. The jobless total has fallen to 8.6 percent from 12.6 percent in 1997 when the Socialist-led five-party coalition won power from the conservatives.

The shorter working week legislation, which came into effect in January 2000, concerns 6.9 million people in companies with more than 20 employees, accounting for about half the private sector. All but 800,000 of the workers concerned are in full-time employment. Rouilleault estimated that 265,000 jobs had been created already through reducing the working week. The law stipulates the shorter working week should be effected with no loss of pay, but there have been some cases of loss in purchasing power and many companies had either frozen salaries or awarded only very slight wage hikes.

Nearly 50,000 collective agreements have been signed to reduce working time. which has been 39 hours a week since 1983. In return, employers have seen a reduction in their social insurance contributions. From January 2002, the 35-hour week law will apply to companies with 20 or fewer employees and to those working for central and local government.

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UE News - 7/01

Home -> UE News -> 2001 Archives -> Article

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