Published: Tue, 08 April 2014
Sean Kelly MEP is calling on the EU to attract manufacturing and services sector jobs back to Europe to boost employment.
“I am calling on the European Commission and Member States to prioritise the ‘re-shoring’ or bringing back those manufacturing and services sector jobs that were moved to locations outside the EU,” Mr Kelly said.
“The manufacturing sector today provides 32 million direct and 20 million indirect jobs in Europe, according to BusinessEurope, so this is a very important employment source that we can expand.”
The South MEP has co-signed a new European Parliament amendment which calls for a concerted effort to be made to bring jobs, such as call centres, textile manufacturing and more, back to Europe.
“Europe lost these jobs to low-cost countries from the 1980s through to the 2000s, and we even have the more recent example of off-shoring in the case of Talk Talk jobs being lost in Waterford. Asia and mainly China has been the main destination for off-shoring since the 1980s,” the MEP explained.
“Today, manufacturers are re-examining the ‘total landed cost’, including labour cost and transport or shipping. Transport is costly, so shipping from Asia is a huge overhead. If manufacturers base their businesses in Europe, they would greatly reduce export costs immediately.
“Of course, there are other factors to consider. In an interesting survey of American manufacturing companies by the Boston Consulting Group (BCG) in April 2012, 37% of those with annual sales above US$1 billion said they were planning or actively considering shifting production facilities from China to America. BCG identified the following reasons for the move towards re-shoring: Labour costs (57%); Product quality (41%); Ease of doing business (29%); and Proximity to customers (28%). So, those are likely to be the issues that Europe needs to address in order to attract jobs growth in that area.
“While it would be a challenge to compete with Asian locations, the EU could potentially incentivise and attract European companies back to their home locations. We need to ensure Europe is an attractive location for the services sector. I am urging EU leaders to revisit this issue as a means of boosting employment,” the MEP said.
The amendment to the Employment Committee Report How can the European Union contribute to creating a hospitable environment for enterprises, businesses and start-ups to create jobs? will come before MEPs for a vote in the coming weeks.