European partnership for anticipating change in automotive industry

In early November 2007, a new ‘European partnership for the anticipation of change in the automotive industry’ was formed by the European Commission, the European Automobile Manufacturers’ Association, the European Association of Automotive Suppliers and the European Metalworkers’ Federation. The aims of the partnership are to monitor developments in the industry and to exchange know-how on managing restructuring in a socially responsible way.

Context

The automotive industry, which employs more than two million Europeans directly and supports an additional 10 million jobs indirectly, is currently facing a number of different challenges. On the one hand, while global demand is growing strongly, the main economic growth is taking place outside of the EU, in countries like Russia, India and China. On the other hand, car manufacturers are struggling with flat demand in the western European market, new competitors from outside Europe and unfavourable currency exchange rates. The future of the industry is also challenged by environmental issues such as the necessity to comply with carbon dioxide (CO2) emission quotas.

The restructuring process that results from these challenges has led to industrial stoppages and redundancies in the sector in several European countries, such as at the Volkswagen plant near Brussels in Belgium (BE0701049I) and at the Opel-GM plant in Antwerp in northern Belgium (BE0705029I, EU0706019I).

In 2005, in response to this restructuring pressure, the European Commissioner for Enterprise and Industry, Günter Verheugen, set up the high-level group CARS 21 – Competitive Automotive Regulatory System for the 21st Century – to discuss how the regulatory framework of the automotive industry could be improved to accommodate the competitive challenges of the next decade. The working group, however, focused on competitiveness and mainly ignored the social consequences of restructuring.

Purposes of partnership

In order to fill this gap, the first specific automotive restructuring forum devoted to better ways of anticipating change in the sector was held on 17–18 October 2007. The meeting resulted in an agreement to launch a European partnership for the anticipation of change in the automotive industry between the European Automobile Manufacturers’ Association (ACEA), the European Association of Automotive Suppliers (CLEPA) and the European Metalworkers’ Federation (EMF).

The partnership, subscribed to by all of the economic and social players in the sector – including the EU, governments, companies, trade unions and regions – has three main aims. These include:

  • setting up a new observatory to study change in the automotive industry and the necessary employment and labour skills;
  • collecting and exchanging examples of best practice dealing with socially responsible restructuring;
  • ensuring the better use of existing support structures such as the European Social Fund and European Globalisation Adjustment Fund.

Views of social partners

In their statements to the press, the social partners indicated that the partnership depends on a convergence of the different actors’ interests.

Secretary General of ACEA, Ivan Hodac, emphasised the continuity to the CARS 21 group and highlighted the importance of improving the competitiveness of the industry. In a recent press release, Mr Hodac noted: ‘The European automotive industry is one of the most regulated sectors in Europe. It is of utmost importance that regulation does not unnecessarily add to production costs, increase bureaucracy and hamper flexibility.’

On the other hand, in a press statement by EMF, Secretary General Peter Scherrer welcomed the new partnership as an important step towards social dialogue. Instead of dealing with restructuring as mere ‘crisis management’, he believes the partnership will aim to achieve ‘consistent policies providing for better anticipation of skills needs and the enhancement of employees’ qualifications’. For an effective social dialogue, however, Mr Scherrer highlights that further steps are necessary, such as the long-overdue revision of Council Directive 94/45/EC on the establishment of European Works Councils (EWC).

President Giuliano Zucco of CLEPA, in his restructuring forum speech (14Kb PDF), also highlighted the need for a forward-looking development of skills and qualifications adapted for the future. Mr Zucco demanded that social partners ‘transparently discuss both the benefits and drawbacks of flexicurity’. Moreover, he emphasised that labour market flexibility should not be isolated from skills development through lifelong learning ‘within a company or the sector (and even beyond)’.

Commentary

The European partnership for the anticipation of change in the automotive industry represents an important step, which tries to go beyond the social impasse reached by the predominantly industry-based CARS 21 group. The partnership is also a test case for other sectors, particularly in the way it is designed to deal with restructuring in a more socially responsible manner.

An issue that warrants further investigation is the environmental impact. The success of the partnership, therefore, will also depend on the participation of other stakeholders, such as environmental groups.

Stefan Lücking, Technical University Munich

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