An industrial policy for the European glass sector

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An industrial policy for the European glass sector

The glass industry is being doubly impacted by the economic crisis, since its activity relies heavily on the economic health of other sectors such as the construction and automotive sectors. Weak economic growth and slowing domestic demand are specifically due to the austerity policies coordinated at European level and together account for the crisis that is affecting the sector.

Between 2005 and 2010, flat glass, which accounts for 29% of the sector in Europe, was affected by a 7% drop in production following the crisis in 2008. In 2013, 15 out of a total of 60 floats in Europe have been stopped. Several of them have closed or are in danger of disappearing altogether. Meanwhile, container glass, which comprises 62% of the sector, has suffered a slump of more than 10% as a result of the economic crisis and the trend to relocate. The same pattern was observed in the glass fibre sector in 2009, but this sector now appears to be picking up once more. Lastly, in terms of competition from countries who are undercutting on salaries, tableware and solar panels are the sectors that have most been affected the most.

On this note, the biggest economic players, namely Saint Gobain, Nippon Sheet Glass, Asahi Glass Company, Owens-Illinois and Guardian Industries, have suppressed European production capacity and employment and have all made a dash towards Asia and the emerging countries whilst reducing, or even abandoning altogether, their investments in Western Europe. That said, new production lines have been opened in the CEE (Central and Eastern European) countries. In the flat glass industry, some new players from outside of Europe are appearing on the market.

Following a constant increase in demand up until 2007 for flat glass, from 2008 onwards the demand dropped sharply. This was due to a decrease in production in the automotive industry, together with the relocation of assembly lines, competition from China for solar panels and the slowing of the construction sector. These four factors have together resulted in an unexpected 20% overcapacity of floats, due to the traditionally risky strategy of multinational companies.

From 2000 to 2010, the sector lost 32% of its jobs, mainly in Germany, Poland, France, Czech Republic, Italy, Belgium and Austria. Since 2010, it would be fair to say that the situation has deteriorated even more rapidly.

A true industrial policy should be underpinned by an economic plan that re-launches the industry at European level and by abandoning short-sighted austerity policies. This, with the aim of enabling the industry to reach 20% of the European GDP as swiftly as possible (the industry currently accounts for 16% of the European GDP). Nevertheless, the future of the glass sector will also depend on the increase of investments in research, development and innovation, to work towards a low carbon and sustainable development-led society.

In particular, it is believed that there are some promising developments in the energy efficiency of glass, its climatic, acoustic and luminous qualities, "smart glass" complete with new features, weight reduction and resistance of materials, self-cleaning glass, lead-free materials in glassware, etc.

The social dialogue, at European, national and company level, should support the transition and influence debates on issues such as European energy policy, as well as ensure the monitoring of training policies, planning ahead for restructuring, preparing for employment transitions, preventing work-related accidents and occupational diseases (crystalline silica agreement) and improving working conditions. This also involves recognition of the fact that this is a tough sector to work in, with occupational diseases and accidents which have an impact on the health of employees.

The CCMI has all the necessary experience, knowledge and contacts to develop an opinion containing concrete and forward looking recommendations to the European Commission, the European Parliament and to the European Council in order to identify an effective path for the implementation of an industrial policy in one of the main EU manufacturing sectors.
 

Downloads

An industrial policy - Yseult Lallemand

Good wine should be drunk in fine crystal glass - Ima Gomez Lopez

Overview of the Glass sector - Graham Hay

The Future of the Glass Sector in Europe - Bertrand Cazes

Une politique industrielle pour le secteur européen du verre - Vincent Detremmerie