What is all about ?
The search for buyers practice, already applied by large companies in the 1980s to avoid the closure of factories that no longer corresponded to the needs of their manufacturing network, is now becoming increasingly common in Europe.
Showcased in France by the Ayrault government since the creation of the “Ministère du Redressement Productif”, (performance enhancement department), the practice is called for, and even required in certain cases, by government authorities, management and unions, and employees. Unfortunately it has been denigrated and over-simplified in the media recently by series of companies that have made the headlines.
There are two responsible solutions offered to the management of large companies faced with the harsh reality. Either they have to close down one or several site(s) and lay off the employees, or try to find an alternative solution by selling the site for an attractive price, saving as many jobs as possible and preserving the social and economic balance of the area:
- The search for a buyer
- The reindustrialization of a site
The first solution – “search for a buyer” – presupposes that the issue be taken in hand as soon as the probable future of the site is known, well in advance. In other words 6 months, even a year, before the closure plans are announced and take effect. In most of the cases, the procedure is confidential.
The time allowed for the continuation of the existing activity allows them to provide the buyer with a trained and skilled workforce that is immediately operational, a quality tool, and above all a subcontracting business. This solution is attractive for two reasons:
- It allows the buyer to set up his own activity, progressively and under optimal financial conditions;
- It allows the workers reemployed in the framework of the new project not to be laid-off, therefore to maintain the same work contract and to preserve their seniority as well as their professional environment….
This, of course, is the solution that is preferred by employees and government authorities…as well as by corporate officers when it meets the needs and expectations of all parties involved.
This solution, if it is decided upon well upstream, allows companies to avoid time-consuming and costly restructuring plans (in particular in countries with strong social constraints such as France, Italy, Germany or Spain), to avoid strikes, which are often highlighted in the media, and also to protect their corporate image while they apply their divestment strategy and meet deadlines.
The second solution – called “Reindustrialization” – has entered into the arena only in the last several years. It is linked to the legal imperatives of the countries concerned. The term “buyer” is still used but the buyer takes over only empty or partially-equipped premises. The employees are not guaranteed a job after they are laid off. However this solution avoids creating an industrial wasteland that would be intolerable to those who play a central role in local economic development and job creation, and allows the local economy to remain intact. In France, this solution is regularly imposed by the government and has become a key part of restructuring plans.
