Government grants EUR 2.2 million for managing structural change in Uusikaupunki

On 31 August 2023, the Government granted EUR 2.2 million to Southwest Finland to mitigate the impact of the sudden structural change in the city of Uusikaupunki. In addition, a separate decision was made to allocate EUR 400,000 in ESR+ funding from the Innovation and Skills in Finland, the EU Regional and Structural Policy Programme, to Southwest Finland. The entire funding is intended for the implementation of an action plan to manage the sudden structural change in Vakka-Suomi and the neighbouring areas.

As a result of the change negotiations concluded in spring 2023, Valmet Automotive announced that its workforce at the Uusikaupunki car factory would be reduced by 940 people. Half of the employees would be laid off and the other half would be terminated. The reductions will also affect subcontractors and providers of logistics and services, where approximately 100 people are estimated to lose their jobs.

Manufacturing is the largest sector in the Uusikaupunki region, and the car factory has a significant impact on the regional economy. The Uusikaupunki region already launched measures in the spring to mitigate the situation. A broad-based group of experts on structural change in industry has met under the leadership of the Regional Council of Southwest Finland. The city of Uusikaupunki has coordinated the preparation of the action plan with stakeholders.

“The funding now granted is expected to play an important role in creating new business and jobs in the Uusikaupunki and Vakka-Suomi regions. Tourism and energy in particular are growth sectors which will benefit from the development of the industrial structure,” says Minister of Economic Affairs Wille Rydman.

Sudden structural change refers to a situation where an employer or sector of regional or national significance makes redundant a large number of employees at once, as a result of bankruptcy or extensive adjustment measures.

Various employment, economic and regional development measures that are specific to the situation aim to prevent a recession of the regional economy. These measures help create new jobs, renew old ones and promote re-employment of those made redundant as quickly as possible.

Inquiries:
Teemu Hartikainen, Special Adviser to the Minister of Economic Affairs, tel. +358 50 563 0200
Marjukka Aarnio, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 150