Responding to the crisis in the automotive industry

Responding to the crisis in the automotive industry

Gist of the opinion

The Committee welcomes the Commission's Communication, which demonstrates that both it and the Member States are ready to support the automotive industry in these turbulent times. It underscores the need for a coherent and coordinated framework to ward off any drift towards protectionism and to set common goals.

The first thing to do is ensure rapid access to sufficient, targeted funding through banks and the European Investment Bank or through state aid and guarantees from the Member States.

The biggest challenge the crisis poses, however, is safeguarding jobs. The important thing is to stave off unemployment and retain know-how in the industry. The Committee therefore urges the use of exchange of best practices and targeted support to keep people in work. Slack periods must now be used for measures to boost workforce skills.

Incentives to boost demand are also needed. On this front, care must be taken to ensure that all financial or fiscal initiatives (such as scrapping schemes) support and accelerate the sector's technological overhaul (energy efficiency of machinery, emissions reduction). In addition, the Committee calls on the Member States, the Commission, the ECB and the social partners to provide the overall macroeconomic environment to safeguard incomes and so fuel domestic demand.

As far as long-term structural problems are concerned, the Committee refers to the Information Report by its Consultative Commission on Industrial Change (CCMI) on "The automotive sector in Europe: current situation and prospects" (November 2007). This sets out clearly the challenges facing the industry and notes that the sector is heading for a profound transformation, accelerated by the current crisis.

If the sector is to emerge from the crisis stronger than before, now is the time to put greater effort into research and development, innovation and skilling of the workforce. This is the responsibility of companies as well as of Member States and the Community. The Committee therefore supports the initiatives set out by the Commission.

Care must be taken not to equate structural problems with overcapacity alone. Europe has seen a sharp drop in capacity (especially in Spain, Portugal and the UK) in recent years. To some extent, overcapacity is inherent in the system (changes of model and internal competition, for example). However, there is a danger that the crisis might cause a massive reduction in capacity, resulting in undercapacity and hence increased imports when demand increases once again. For this reason, the Committee calls for this issue to be examined by the CARS 21 high-level group.

The Committee also draws attention to the importance of the downstream markets (an opinion on the subject is being drafted and will be issued shortly). It calls for a high-level group to be set up that capitalises on CARS 21 experience and gets to grips with the specific challenges facing players in the downstream sector.

The cornerstone of the continued success of the European automotive industry is open access to world markets and fair competition. For this reason, the Committee welcomes the Commission's intention of stepping up dialogue with trading partners. Developments in the USA and Asia (in particular South Korea), must be monitored to ensure a level playing field.