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Dangerous Times In The Car Business

  • November 7th, 2007
  • Posted by EUEditor

cars-ld-resize2.jpgPressure on European car makers including competition from Asia is to be met with a round-table system bringing together governments, manufacturers and unions – with strategic financial relief at EU level.

The European Commission and the main industry and workers’ organisations in the car sector have formally announced at Brussels (5.11.07) a new partnership agreement on managing change.

“Twelve million European families depend on the automotive sector for their livelihoods,” the European Employment Commissioner, Vladimír Špidla, said.

“While the sector faces tough challenges such as increased competition and restructuring, there are also big opportunities …

“The car industry is an important source of prosperity, employment and innovation; we need to ensure competitiveness and employment in this strategic industry while sustaining further progress in safety and environmental performance at a price affordable to the consumer.”

The agreement authorises coordinated monitoring of change and planning for employment and skills needs; “exchange of best practice” on socially responsible restructuring, and effective application of funding from central sources such as the European Social Fund and European Globalisation Fund, to support adaptation to change.

The initiative brings together the Commission and the European Automotive Manufacturers’ Association (ACEA), the European Association of Automotive Suppliers (CLEPA) and the European Metalworkers Federation (EMF).

It follows a high-level restructuring forum in Brussels last month involving 250 high level representatives from European institutions, companies, trades unions and national and regional authorities.

According to EC figures the automotive sector provides work for more than two million Europeans and supports an additional 10 million jobs indirectly. It accounts for approximately 3% of EU GDP, contributes some €60-billion to exports (A$93.8-billion; (4% of total EU manufacturing exports) and is the largest private Research and Development investor in Europe with over €20-billion (A$31.27-billion) invested annually in innovation.

Its “challenges” are seen as growing international competition, changing societal demands related to mobility, environmental concerns and road safety, shifts in demand around the world and skills shortages to replace an ageing workforce. Car makers have identified an immediate problem, to hold the line against cheap small car imports; containing costs while maintaining standards of quality and safety.

EC, “EU partnership to help 12 million car industry workers adapt to change and reinforce competitiveness”, 5.11.07, IP/07/1644
Text of agreement:

Information on restructuring forums: