ETRMA joins auto associations in call to ‘save jobs while reducing emissions’

IndustriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA call for an ambitious recovery plan for the automotive sector

European automotive business organisations and trade unions have called on the European Commission to set out a “bold industrial recovery plan” following the Covid-19 pandemic. IndustriAll Europe, Ceemet, ACEA, CLEPA, CECRA, and ETRMA want a plan to stimulate sales and revive production, while supporting the industry’s “journey towards a carbon-neutral future, based on the Green Deal and Europe’s climate objectives.” The associations want to address fears that the recession will dwarf the effects of the 2008 financial crisis, in which it says 440,000 auto sector jobs were lost.

The joint statement argues that the automotive sector is “one of the key pillars of the economic and social welfare of Europe.” It provides employment to 13.8 million workers indirectly. European assembly plants produce one in every four cars worldwide. The sector’s level of innovation is also high, accounting for 20 per cent of industrial research funding in Europe. With global leadership and a strong export orientation, the sector is “a driver for jobs and economic growth across Europe. As a result of the substantial economic interlinkages with other sectors along the value chain, its importance for employment and growth for the whole economy is clear.”

‘Unprecedented crisis’

The current moment represents an “unprecedented crisis” for the sector, as a result of the simultaneous freeze in sales and production, in addition to costly measures introduced to enable work to restart. Workers’ incomes have been reduced and companies’ revenues have disappeared. At the same time, the introduction of cleaner car models has been postponed.

The joint statement continues: “The economic and social impact of the COVID-19 crisis on the automotive sector is particularly severe. Workers, although supported by short-time work arrangements, have seen their incomes reduced, and companies are facing cash drains as their revenues have disappeared. Currently, there is little visibility on what the future holds. If this situation persists, the sector risks a meltdown with large-scale bankruptcies and restructuring.

“During the financial crisis (2008-13), the automotive sector lost 440.000 jobs (in car production and the aftermarket). If no measures are taken, this number risks being dwarfed by the current recession which may be much deeper.

“Therefore, industriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA, the European business organisations and the trade unions for the sector call on the European Commission for a bold industrial recovery plan. Such a plan should be based on two objectives. First of all, bringing the industry back on track by stimulating sales and reviving production, and secondly, supporting the industry in its journey towards a carbon-neutral future, based on the Green Deal and Europe’s climate objectives.

Protecting Green Deal investment

“To date, the sector has been substantially investing in its transition towards the new paradigm of a carbon-neutral and digitalised economy: including, alternative powertrains, batteries, connected cars, mobility services, and automated driving. The industry can make a real contribution to the Green Deal and mitigating the climate emergency. But due to COVID-19, strong support from the national governments and the Commission is needed in order to help the sector to make the necessary investments in transitioning to decarbonisation while supporting European jobs and keeping its contribution to EU exports and the social welfare of European citizens.

“To bring the sector back on track and enable it to emerge from this recession, the European automotive sector urgently needs:

• Coordinated measures to support the relaunch of the industry including the aftermarket with harmonised guidance on preventive health and safety measures for the workplace; coordination is also needed to avoid further disruptions in the sophisticated automotive supply chains.
• Support for viable companies to maintain their resilience. To avoid stranded assets liquidity support has to be maintained as long this is needed: state aid, investment guarantees, tax breaks, soft loans
• Support for companies in maintaining/developing their human capital while the income and job security of workers must be preserved e.g. through continuation of short-time work arrangements connected to skills upgrading
• Introduce/reinforce temporary demand stimulus measures by vehicle renewal schemes that are coordinated on EU level and financially supported by the Commission. These measures should be eligible for latest technologies and in addition be differentiated according safety and environmental performance based on certified CO2 emissions. Demand stimulus is needed to re-start the assembly lines and to preserve jobs. It should also restore the capacity of companies to generate the cash flows they need to invest in a sustainable future.
• Take into account these extraordinary circumstances when assessing the impact of regulatory reforms on the sector.”

Call for EC support

The associations called for the European Commission to take a number of actions “to support the sector in delivering on the digital and low-carbon transitions:

• Develop and maintain technological leadership by means of ambitious technology programmes to support both digital and low-carbon transitions
• Provide investment support (grants, loans, equity) for the market introduction of new sustainable technologies
• Accelerate the roll-out of charging and re-fuelling infrastructure for cars, vans and commercial vehicles in public, as well as private, places, and deliver at least 2 million charging points and refuelling stations across the EU for all vehicle types as indicated earlier.
• Introduce/reinforce market incentives to promote the uptake of alternative powertrains
• Promote industrial collaboration and industrial alliances to share the cost of the development and market introduction of new low-carbon technologies
• Facilitate investments in the next generation digital infrastructure as a key enabler for more reliable connectivity between vehicles
• Make use of innovative public procurement to support demand and to bring new innovations to the market
• Boost investment in the research and developments as well in the production of batteries, hydrogen, and low-carbon liquid fuels, within the European Union.
• Develop the circular economy connected to the automotive supply chain (recycling, re-manufacturing, re-use)
• Support the many automotive SME’s in redefining their value chain positioning in a fast-changing automotive landscape.”

Anticipating the pressure on the jobs market, industriAll Europe, Ceemet, ACEA, CLEPA, CECRA and ETRMA, called jointly for “the organisation of a just transition for every worker affected by restructuring.” It wants the European industry to anticipate the changes to come, with “an effective social dialogue at all levels, active labour market policies, up-and re-skilling, and support to redevelopment plans for automotive regions.”

The statement concludes by calling for “the upcoming European recovery plan” to acknowledge the sector’s investment “in its transition” and the “ambition to continue these investments once it has overcome the COVID-19 crisis. To save jobs and companies, it is important to act decisively to ensure the continuity of economic activity, to stave off bankruptcies and to prevent mass layoffs. The EU must maintain the ambition to keep the full automotive value chain inside the EU. This would allow the EU to keep a strong European automotive sector and to maintain our global leadership in clean vehicles, to deliver on its climate objectives and to maintain/create high quality jobs. Finally, a recovery of the automotive sector will generate positive knock-on effects for the overall economy.”