European Parliament Adopts Resolution Calling for Measures to Support Job Creation in the Auto Industry and “Green Technologies”

26 March 2009

A cross-party resolution adopted by the European Parliament (EP) calls for measures to support job creation in the European automotive industry, and to encourage the development of “green technologies”, with which there is “significant potential for job creation...in the automotive sector”. The resolution was adopted by 413 votes to 44 with 13 abstentions.

The European automotive industry is key to the EU economy, employing 12 million workers directly and indirectly—6% of the employed population in the European Union. The industry has been badly hit by the global economic crisis, and has seen a significant drop in demand during the last quarter of 2008 and the first of 2009.

This has led to a consequent decrease in production which puts “inevitable pressure on employment and investment levels in the EU.” The UK is facing significant problems in this industry, with the Society of Motor Manufacturers reporting that the number of new car registrations fell by 30.9% in January.

The measure says that the automotive industry is vital for the European economy because of its “multiplier effect for other sectors and industries”, particularly for small and medium sized businesses (SMEs). In the UK alone, more than 800,000 jobs are reliant on the car industry.

Among the specifics, the resolution:

• Asks the European Commission to ensure best use of the European Funds available in support of jobs.

• Reaffirms that the automotive industry needs continuous investment in R&D programs delivering the best possible solutions for quality, safety and environmental performance to achieve a sustainable competitive framework, and therefore invites the Commission in that context to facilitate, improve and speed up the access to EU support instruments for R&D and innovation, such as the Seventh Framework Programme for research and technological development.

• Calls on the Commission to draw up guidelines and recommendations for measures encouraging a coordinated approach to fleet renewal, such as scrapping schemes and other market incentives, having positive and short-term effects on consumer demand for new motor vehicles and aimed at reinvigorating the automotive leasing market. It also calls on the Commission to monitor national measures already implemented in this context to avoid distortions on the internal market;

• Confirms the need to deepen the dialogue and on-going discussions with third countries and the main EU trading partners on the future of the automotive sector, and calls on the Commission to monitor closely developments in non-EU countries, notably in the United States and Asia, to guarantee a level playing-field at international level, refraining from protectionism and discriminatory measures in the global automotive market.

MEPs are also concerned with some of the short-term measures adopted at national level by Member States (e.g., France, which is talking about moving production out of other countries and into France), which could ultimately result in a distortion of competition within the single market. They are calling on Member States to ensure that any future measures are “coherent, efficient and coordinated.”

The debate on the resolution surfaced questions about the extent to which public funds should be used to bail out carmakers, and in return for what.

During the debate, Industry Commissioner Gunther Verheugen called on European governments to coordinate their dealings with General Motors, which he characterized as facing bankruptcy and keen to offload its European operations—Opel (Vauxhaul in the UK) and Saab—which employ 200,000 people.

Resources

• Adopted text