A small anthology of applications for collective dismissal, in the last seven days alone: 132 jobs at Decathlon, 130 at Milcobel, 95 at Beaulieu, 51 at Icopal and 150 at Crelan/Axa. There was the bankruptcy at Van Hool, the feared job losses at Audi Vorst and Bpost is also on strike in Wallonia for fear of restructuring.
Is it really that bad? Statistics seem to indicate yes: there appears to be a significant increase in the number of applications for collective dismissals. Last month, collective dismissals were submitted for 1,448 jobs – surprisingly all in Flanders. In March last year this was only 965. In February that figure was also remarkably high with 813 announced dismissals.
Each company has its specific reasons for taking this step, but there are also a number of common factors. “Such as the deteriorated competitive position of our country,” says Voka spokesperson Eric Laureys. “Particularly the increased wage costs due to automatic wage indexation.”
But that significant indexation dates from more than a year ago. Why are we only seeing this effect now? “Only a year later will the settlement be made and specific measures will be taken in the form of closures and restructuring.”
Government support in US
The unions see it differently. “Research shows that wages represent only a very small part of the total cost of a company, especially in the industrial manufacturing sector,” says ACV spokesperson David Van Bellinghen.
He does point to another cause. “Government support in China and the United States. With the Inflation Reduction Act, President Biden has pumped billions of euros of public money into the industry. This has made it more interesting for many companies to move to the US. And there is China’s state-run economy. What are we doing in Europe? We do not form a bloc, but we kill each other to bring as many jobs as possible to our own country.”
In addition, there is the sputtering German economy. Van Bellinghen: “Look at Audi Brussels: it was restructured in our country to save jobs in Germany. Exports are also declining enormously. When it rains in Germany, it drips in the rest of Europe: it is and remains the engine of the European economy.”
The high energy prices of recent years are also occasionally blamed. “That plays an important role,” says Laureys. “It is a major expense for any company, especially in the industrial sector. Energy costs in Belgium are still structurally higher than in the rest of Europe. While the German and French governments have intervened to reduce those costs, we do not have such deep pockets.”
There is a bill on the table from Energy Minister Tinne Van der Straeten (Green) that should provide extra support to those large users. But the question remains whether this will pass through parliament before the elections.
Zombie companies
It is strange that we saw fewer collective redundancies in previous years, just when energy prices were at their peak. That doesn’t surprise Laureys. “During the corona crisis, the government imposed a moratorium on bankruptcies to prevent too many companies from going bankrupt. That has simply drawn the death throes for some unhealthy companies. Zombie companies that barely existed were artificially kept alive. But that was about smaller companies and not the major restructurings that we are seeing now.”
“For us, there is no economic malaise in Belgium,” says Miranda Ulens, general secretary of the ABVV. “The growth figures rather show that our country is performing well. Not all restructurings amount to failure. Now just look at what’s going on at Decathlon: they are more likely to make a profit. A social malaise is now being organized there.”
Bad news for Belgian employees. Although, due to the tightness on the labor market, they quickly find a new job, it appears. That won’t change anytime soon. Laureys: “That shortage is structural because of demography. For every 100 workers who retire, only 80 new ones enter the labor market. It is clear that on top of that, there needs to be plenty of activation.”
Last week, the consumer barometer showed that the average Belgian currently does not have much confidence in the economy, partly due to the bankruptcy of Van Hool. And this just six weeks from the elections. Will that play a decisive role in the electoral booth?
“There are no bite-sized studies into this,” says labor economist Stijn Baert (UGent). “But we know from all kinds of polls that there are two themes that attract Flemish people to the polls: purchasing power and migration. So it can certainly play a role if people are concerned about keeping their jobs. And so this could well be unfavorable for those who have implemented policies and beneficial for those who have stood on the sidelines and can take populist positions.”
