Europe in auto industry crisis talks

As Europe's once powerful auto sector struggles against falling sales, EU industry commmissioner Antonio Tajani on Thursday said ministers will draw up plans by December 10 to save their carmakers.

"It is the European Commission's duty to prevent carmakers from leaving the Union,'' said Tajani after the loss of thousands of jobs in recent weeks at Ford plants and France's Peugeot Citroen.

"Each closure of a plant is like an injury,'' he added. "If we don't act, we risk facing a plant closure a month.''

Tajani said he would gather car producers, trade unionists and government officials by the end of the month to draw up a coordinated response to the crisis, looking at over-capacity, investment and state aid measures.

Among measures are plans to build greener and safer cars, strike trade deals to improve access to emerging markets and harmonise rules and regulations.

One of the biggest industries in Europe, the auto sector accounts for over 12 million jobs, directly and indirectly, with some 180 vehicle plants and more than 700 billion euros in turnover.

It is also the top private R&D investor, at around 30 billion euros in 2010.

"Because of the multiplier effect it has in the economy, the car industry should provide a strong impetus to maintain a strong industrial base in Europe,'' Tajani said, adding that he hoped to draw up a coordinated plan before the talks.

Car sales have been on the decline for five years and are expected to fall by almost 8.0 percent this year, with no hope of a return to pre-crisis levels for up to a decade on some markets.

"We are not just talking about Fiat, Volvo or Daimler, but thousands and thousands of small- and medium-sized businesses,'' Tajani added.

European manufacturers welcomed the EU's so-called Cars 2020 plan for action but called for urgent measures to cope with the social and economic consequences of current restructuring and cautioned against "unbalanced'' trade agreements.

"We cannot afford to open up our markets in times of crisis unless there is a level playing field,'' European Automobile Manufacturers' Association head Ivan Hodac said.

But it backed proposals to make 'clean vehicles' an investment priority and to improve competitiveness in trade, transport, energy and climate policy.

"Smarter, more coordinated and streamlined regulation is needed to reinforce the automotive industry's competitiveness and benefit the European economy as a whole,'' the association said.


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Writer: AFP
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