A new approach of Industrial “Re”-Conversion avoiding Social plans

A new approach of Industrial “Re”-Conversion avoiding Social plans

A method of "Intelligent Disengagement" for industrial groups who want or need to withdraw from a subsidiary or from an industrial site. The method avoids the implementation of a social plan, allows the recovery of all employment contracts, and the installation of developing SMEs. Including the necessary project financing to produce new products to be installed on the site instead.

An innovative solution

This approach and its methodology were developed and implemented successfully since 1998 by some small independent consulting agencies. It has now been adapted and improved by the ICONE Group for larger consulting teams and more important reconversion projects.

"Industrial Conversion" - A real solution

Our methodology of "Industrial Conversion" involves the transfer of the entire workforce of a production site of an industrial group, the "transferor", to another industry owner, here the "buyer" . In most of the cases, the buyer will install different productions than the ones used by the transferor. This is the main difference in comparison to a traditional acquisition, where the new owner will take advantage of existing businesses and products.

Industrial Moves
Experienced Teams

The Reconversion is a complex process because it includes both a highly technical approach (analysis of technical skills of staff, taking into account the existing and future production means, logistic location, ...) and also a complicated organizational approach, involving several areas (M & A , HR, Unions, Legislation,...). ICONE Group, through its' approved methodology will define the industry and products that could be produced on site, and find the right target investor.

ICONE Groups assist clients and potential buyers through all phases of this methodology, until the transfer of all employment contracts. This approach avoids a long and expensive social plan, and must be started BEFORE a social plan enters into force.

Re-Industrialisation vs Industrial Reconversion

At one point of time, most international groups are forced to withdraw from one or more subsidiaries or manufacturing facilities in Western Europe, for various reasons:

  • The products reach end of life,
  • The activities of the site are no longer the core business of the Group,
  • The subsidiary or the industrial site is no longer competitive,
  • Relocation to "Low Cost" countries reduces the production costs,
  • The company must follow the main clients who relocate their manufacturing facilities,
  • The clients reduce their number of suppliers,
  • etc…

For their disengagement, In this case, industrial groups usually think first about "classical solutions" by:

  • Stop the activity of the subsidiary or the site through a complete closure,
  • Significant downsizing of employees,
  • Eventually, the declaration of bankruptcy of the subsidiary.

These solutions perform poorly because they:

  • Create a sense of abandonment among the employees,
  • Cause social disruption on the respective site for the time of the announcement of the decision of closure or downsizing,
  • Create an impact on other Group units,
  • Deteriorate the image of the overall Group,
  • Induce very high costs of closure and implementation of a Backup Employment Plan (PSE),
  • Reach their limits in most job-critical regions because the traditional solutions for re-industrialization, endogenous reclassification, are often inefficient (at average 60% of employees are still unemployed two years after the implementation of an Employment Plan (PES).

Our solution of “Intelligent Disengagement” is a real response to this situation. We can prove this with a lot of examples, see also our References.