The automotive industry is a key sector in the EU economy. Europe is the world’s largest producer of motor vehicles, making almost a third of its passenger cars. According to the European Automobile Manufacturers Association (ACEA), within the EU there are around 240 vehicle production and assembly plants in 19 Member States, producing passenger cars, light commercial vehicles or vans, buses and coaches, medium-sized and heavy duty lorries and engines, plus over 8 000 equipment manufacturers. The sector is Europe’s largest private investor in research and development, investing nearly € 20 billion in this area annually, and is a key driver of innovation.
The automotive sector is a major employer of skilled workers. In 2007, according to ACEA, it employed directly 2.2 million people in the EU (6.5 % of total employment in EU manufacturing) in automotive manufacturing, equipment and accessories, plus bodywork, trailers and caravans. A further 9.8 million people were employed indirectly in related manufacturing activities (eg tyres, gears and electrical equipment), automobile use (eg sales, distribution, maintenance and repairs) and passenger and freight road transport. The EU Member States with the largest direct automotive workforces are Germany, France, the UK, Italy, Spain, Poland and the Czech Republic.
Over the past century, the automotive industry has been characterised by one constant factor: change. It was thus already undergoing a process of restructuring before the onset of the financial and economic crisis in 2008-2009. It was facing: overcapacity and declining car ownership through increased urbanisation and congestion; stagnation in western markets, though coupled with significant growth elsewhere; consolidation; and increasing fuel costs and environmental concerns. The crisis has only compounded the sector’s inherent problems. For an overview of the drivers of change in the automotive industry, see box 2.6.
Against this background, the various actors in the automotive sector have increasingly become aware of the need to anticipate change, and to take a proactive approach rather than to react in a defensive and protectionist way. Areas where the automotive industry has been active in moving forwards and formulating new policy include using new technology, specifically green technology, in response to environmental concerns.
Box 2.6: Drivers of change in the automotive industry
Changes in society and evolution of demand. The need for mobility remains high in mature economies and is increasing in emergent ones, but is accompanied by new pressures and aspirations, such as environmental concerns, urbanisation, demand for differentiation and increased energy prices. The car is becoming less a prized possession and more a means of transport (which increases competition with other modes of transport, especially in cities, and raises the importance of user costs).
Emerging technology. The car industry has always been one of the most innovating sectors and is likely to be even more so in the future. Three areas of technology are particularly important: electronics and ICT; new composite materials; and new, non-fossil fuel forms of propulsion.
Company strategies. The European industry is composed of internationally recognised specialist manufacturers and large generalist ones less involved in exporting. The pace of internationalisation of the latter will be important in competition with low-cost producers outside Europe, as will be the range of models they can offer and the innovations incorporated in them.
Policies of regulation. Such policies include fiscal measures as well as the regulatory framework as such, and affect both: the supply side, by imposing, for example, limitations on CO2 emissions; and the demand side, by raising prices, as well as stimulating new technologies.
5.1: EUROPEAN PARTNERSHIP FOR THE ANTICIPATION OF CHANGE IN THE AUTOMOTIVE INDUSTRY
A European partnership for the anticipation of change in the automotive industry was launched in October 2007 on the occasion of a Restructuring Forum on the sector organised by the European Commission. The partnership is based on a joint declaration61 by ACEA, representing automotive manufacturers, the European Association of Automotive Suppliers (CLEPA) and the European Metalworkers’ Federation (EMF), supported by the Commission. The partnership’s aim is to better anticipate and manage changes in the European automotive sector, thus contributing to the industry’s sustainability.
The partnership declaration presents a common diagnosis of the issues facing the sector. It outlines the role and responsibilities of each actor (the EU, governments, companies, trade unions and regions) in the common mission of: maintaining and strengthening the competitive position of EU automotive companies; creating high-quality jobs; and reinforcing the employability of the sector’s workers, seen as a precondition for sustainable growth and social cohesion. The declaration sets out ‘key factors of success to overcome the challenges’ facing the industry, as follows:
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mutual trust and partnership are essential between all the actors;
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there must be better regulation and policy coordination, particularly relating to competitiveness, environment and employment;
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innovation is the key factor for competitiveness;
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investment in employees’ skill enhancement is vital;
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improvements in productivity must continue; and
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it is necessary to continue to facilitate anticipation, preparation and good management of change and restructuring.
The parties agreed to work together in order to support the creation of analysis and forecasting tools, cooperate in the dissemination and discussing of the findings, and ensure the provision of accurate anticipation and adaptation tools.
Two 12-month projects have been conducted by CLEPA and EMF — with ACEA and the Council of European Employers of the Metal, Engineering and Technology-Based Industries (CEEMET) acting as observers — with the aim of implementing the partnership’s work plan.62 The European Commission’s Directorate-General for Employment, Social Affairs and Inclusion provided financial support. The first project focused on good practices in the anticipation of change and skills needs and the enhancement of employability, while the second tackled issues such as sustainable mobility, evolving societal demands, energy supply and efficiency, and electric cars. For more details, see box 2.7.
Box 2.7: European partnership for the anticipation of change in the automotive industry — main outcomes of projects, 2008-2011
First project, 2008-2009
The project produced three studies, dealing with:
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good practices in anticipating and managing change within companies and regions;
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good practices in increasing skills levels and employability within companies, regions and sectors; and
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an analysis of automotive regions.
Two dissemination events were held to mobilise the actors around the main principles and objectives of the project:
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a forum on good practices in anticipating and managing change within companies and regions in the automotive industry, held on 15 June 2009 at the Committee of the Regions, Brussels; and
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a forum on anticipation of change in the automotive sector, held on 14 October 2009 at the European Parliament, Brussels.
On the occasion of the forum in October 2009, CLEPA and EMF presented a joint declaration63 which addressed the key issues currently faced by the automotive industry and identified the main actions to be taken in order to tackle them. The joint declaration recommended action in the following areas:
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the creation of a Pan European Observatory that draws upon the best practices of government bodies, consultancy companies, and research institutes and acts to coordinate activity between the existing observatories; builds on a network of international agencies; conducts primary research, and makes policy options available to key stakeholders. The ‘European Observatory’ would in this way provide analysis of drivers of the long term eg consumer attitudes, changing life style, urbanisation, that can also be fed into the national observatories and so inform European, regional and company decision-making;
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the financing of primary research on the objectives and challenges (eg environment, pricing, urban adaptation, sustainable development, Corporate Social Responsibility, and the relationships between them) of the industry so firms can better align themselves strategically;
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the setting up of specific partnerships, with European Social Fund support, to minimise social impact ie specific action plans and burden sharing agreements with regional and local authorities; and
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the financing through the European Social Fund of business and education initiatives that focus on the tools and techniques of anticipation in the automotive industry.
Second project, 2010-2011
The second project focuses on actions on three issues:
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mobility, quality of life and societal demands;
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the impact of regulatory changes; and
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integration of the supply chain.
Main events under the project include:
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a conference entitled What future for transport? Beyond challenges, towards a shared vision for mobility, held on 27 April 2010 at the European Economic and Social Committee, Brussels. This conference debated the question of future mobility and its impact on the automotive sector with a view to deepening collaboration of the sector’s main actors and developing a joint policy approach to enhance the future competitiveness of this industry. The project participants believe that only by anticipating future changes in mobility and transportation needs, can the European Automotive Industry generate growth, efficiently reallocate labour to relevant activities and, at the same time, upgrade workers’ skills to contribute to their long-term employability;
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a forum on electro-mobility, held on 30 June 2010 at the European Economic and Social Committee, Brussels. This forum provided high-level discussions among all relevant stakeholders with a view to fostering an ‘integrated approach’ that will enable electro-mobility to achieve the expected results in terms of competitiveness and employability of the workforce. In terms of future action, the following areas are a priority: ensuring that alternative propulsion vehicles are at least as safe as conventional ones; fostering education and training practices to ensure the transition of the workforce through new green jobs; promoting common standards that will allow all electric vehicles to be charged anywhere in the EU; encouraging installation of publicly accessible charging points; ensuring the development of smart electricity grids; and updating the rules and promoting research on recycling of batteries; and
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two more public events on the impact of the regulatory framework (27 October 2010) and integration of the supply chain (January 2011).
These two projects can be seen as an important contribution to the debate about the key issues facing the automotive industry in the future. They have brought together the main actors concerned with this sector and have brought relevant issues to prominence at EU level. The main stakeholders have formulated a plan of action that will now take these issues forward.
5.2: ANTICIPATION OF SKILLS NEEDS — TOWARDS A EUROPEAN SECTOR COUNCIL
As part of the European partnership for the anticipation of change in the automotive sector, the EMF and CLEPA called in October 2009 for the creation of a pan-European observatory on skills issues. In an April 2010 Communication entitled European strategy on clean and energy-efficient vehicles,64 the European Commission stated that, based on this request, it would establish a European sectoral skills council for the automotive industry, involving a network of national observatories. The initiative forms part of the Commission’s current initiative to launch European Sector Councils on Jobs and Skills in a number of pilot sectors — see section 4.3 of this chapter for details.
The context for the automotive initiative is that the sector is increasingly being affected by technological changes, which are themselves closely linked to new societal demands. These technological changes imply renewed efforts in research and development and create high pressure in terms of new skills requirements and qualification needs. Adverse demographic trends also constitute a major challenge.
Automotive industry stakeholders therefore see it as very important to anticipate these changes and prepare companies and workers well in advance, in particular to ensure that the sector has a suitably skilled workforce throughout Europe. Any successful business innovation policy depends on accurate anticipation of the skills needs and on avoiding skills shortages. New tasks, new skill profiles and new working arrangements will be needed in the automotive sector, and it is thus necessary to reflect on how to manage the transformation process. Anticipating needs and reinforcing investment in education and training are essential to give the European automotive industry a suitably skilled workforce, thus guaranteeing its future competitiveness.
The European-level automotive social partners and industry organisations are now working on concrete ways of establishing a European sectoral skills council, by mapping existing national and regional sector councils and labour market intelligence concerning the automobile industry throughout the European Union.
The role of this council would be to help existing national observatories on skills and qualifications in the automotive sector, facilitate the exchange of information between them, and allow its dissemination to a wider audience. The participants would be the European social partners and representatives from national sectoral observatories. The Commission would act as an observer and support the initiative financially.
A European sectoral skills council will not bring about ground-breaking technological innovations but it will provide the necessary information and exchanges of good practice. This will help to ensure that the European automotive industry’s workforce can rapidly and effectively adapt to technological innovations and challenges.
Aside from sector-specific concerns, SMEs have particular needs and are in a different situation from larger companies when it comes to maintaining and improving the skills levels of their workforce. Therefore, in the final part of this chapter, we turn to the specific challenges faced by SMEs.
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