Car Industry an Endangered Species in Europe

[Menydh]

The EU can lose its car manufacturing plants within 50 years

El Mundo, January 13, 2005

Pischetsrieder says that China has become a deadly threat for the automobile industry

Brussels.- The European car industry will cease to exist in the European Union in 50 years if it doesn't achieve an increase in competitivity, since it will not be able to fight off the competence from Asia, and especially from China.

This is the uncertain prediction made yesterday in Brussels by Bernd Pischetsrieder, president of the ACEA (the European Association of Car Manufacturers) and president of Volkswagen, after his meeting with the EU Industry Commisioner Günter Verheugen.

"It is a matter of time if we don't succeed in making the industry more competitive in costs in the world market, in a period of 50 years it will be difficult that this industry can exist in Europe", said Pischetsrieder in answer to the question of how many job losses were currently in danger in the Automobile Industry.

"The key question is not to know how many jobs will be lost", he explained, and added that "China will soon start to dessign and manufacture its own cars and, if this trend doesn't change, in 50 years time there will be no European Automobile Industry".

It is precisely to solve the problem of competitivity that is affecting the sector, that the Commission and ACEA have created a high level group, named Cars 21, in which representatives of the European Parliament will participate. The goal of this group will be to elaborate a list of "concrete and innovativing recommendations to try to put the European Automobile Industry in the first places of the start of this car race", explained Verheugen.

In fact, much in line with the interests of this sector, the Commissioner announed forthrightly that the Commission "will no doubt" in retiring any European legislation that the high level grouop considers an obstacle to the competitivity of the sector, although he assured that he will not question the rules on competition boosted by Mario Monti.

Despite having defended the industry with more vigour than Pischetsrieder himself, the Commisioner, of German nationality, replied much offended to the question of one journalist that he does not receive any extra salary from anyone, in relation to the list of politicians that Volkswagen has in its payroll.

[Menydh]

The funniest thing is that, while it has been at least since 20 years that it was known that the car industry was becoming an obsolete and uncompetitive industry, it is now nearer to a closing date that they say that they have decided to do something about it.

I wonder how drastic these measures will be and how will they affect employment and wages, and what other lectures can be read from this.

[Arawn]

Do what the Japanese do, increase automation. The Japs are meeting Chinese competition this way. Though i think there will always be an European car industry, a specialised one making spiffy sports cars and the like.
If German companies can make concrete breakthroughs in fuel-cell tech, then they may have a niche secured for some years (they already make fuel-cell powered subs).

[Menydh]

Originally Posted by Arawn

Do what the Japanese do, increase automation. The Japs are meeting Chinese competition this way.

Or in other words, cut thousands of jobs and reconvert those waged workers into beneficiaries of a weak welfare state. And since their skills will be worthless from that point onwards, we will be talking of many thousands of long term unemployed with practically no chances to regain other skills which allow them to resume activity.

Though i think there will always be an European car industry, a specialised one making spiffy sports cars and the like.

That's peanuts. The number of jobs provided by such industry is extremely marginal compared to the overall car industry.

If German companies can make concrete breakthroughs in fuel-cell tech, then they may have a niche secured for some years (they already make fuel-cell powered subs).

Technology spreads too fast nowadays to allow it to provide for a long or even medium term leading edge which allows to maintain the industry. Competition lies mostly in low, slave wages imposed by developing countries.

I think that the message there is clear: a free licence for the industry to cut jobs and reduce wages below limits.