At the end of last year, the European Commission had initiated proceedings pursuant to the EU‑Merger Control Regulation to examine the planned takeover of Embraco, the cooling compressor sector of Whirlpool, by Nidec. Based on the findings of a market analysis it had carried out, the Commission voiced concerns that the takeover would lead to a too high market share in the supply of cooling compressors, thereby having an effect on competition. During the proceedings, Nidec would have the option to appeal against this - so far only preliminary - decision and the market analysis of the Commission. Another route suggested by the Commission would be to sell a part of the company’s business to guarantee sufficient competition.

Far-reaching consequences for the Fürstenfeld location

For the employees working at the plant in Fürstenfeld, which was only bought by the Japanese Nidec Group in 2017, the planned takeover of Embraco or its sale has far-reaching consequences. The plant is located in a structurally weak region in the border area. Both rate of employment and average wages are significantly below Austrian and Styrian average. Since the outbreak of the financial crisis, the plant has been living through turbulent times: due to dumping competition from Asia and a lack of investments, the then owner ACC went bankrupt in 2012; subsequently, the plant was bought by financial investor Aurelius.  

The takeover by Nidec in 2017 gave the workforce some hope. The company appeared to have a long-term plan for the location: since 2017, Nidec had invested 8 million Euro and created 100 new jobs in a structurally difficult region. Apart from that, the company announced investments of further 50 million Euro, which could save up to 700 jobs in the region. Against this background, the (preliminary) decision by the Commission was greeted with great incredulity by both workforce and population. If Nidec would sell the plant one has to fear that jobs at the location - and subsequently in Europe - would be lost and transferred to Asia. This has also been demonstrated by current examples of the sister plants of the location in Italy and Spain. Following the takeover of strategic investors, production seized in Europe; no investments were made.

Pesserl: Fight for the preservation of jobs and criteria for the sale

“It was important to me to demand that with regard to the decision of the Commission's Competition Directorate-General, preserving the location and jobs would come first”, declared AK Steiermark President Pesserl, who, for that reason, had travelled to Brussels with experts of the Economic Department. In the discussions, he was supported by employees of the AK Brussels Office. There was an intensive exchange with Deputy Director-General Madero and his team concerning the current situation at Nidec and the consequences of possible job losses. A meeting with Commissioner Margrethe Vestager has been scheduled for May.

From the AK’s point of view it is important that - should a sale of the plant in Fürstenfeld take place - the Commission will apply criteria, which safeguard location, existing jobs and planned investments. The Chamber of Labour has drawn up a detailed list of such criteria, which it has submitted to the Commission. “We were promised that prior to the sale being approved, there will be detailed examinations as to whether the future buyer will be able to preserve both plant and jobs, make investments and operate as a potential competitor on the market”, summarises AK Steiermark President Pesserl. A decision in the case will be taken in the near future.

Further information:

Merger control: Commission initiates thorough examination of the planned takeover of the Cooling compressor sector of Whirlpool by Nidec