Protect workers & industrial capacity now
She stressed the need for a European worker safeguard mechanism. She reiterated the findings of a new Eurofound study that has concluded that 80 000 job losses have been announced between June and December 2024 in the European automotive sector, in the form of restructurings or even site closures. This restructuring is hitting workers in incumbent and new parts of the supply chain that are 100% in line with climate objectives (Audi Forest, Northvolt).
Judith Kirton-Darling said: “This is a disaster for impacted workers and regions; there is a risk of losing collective expertise and infrastructures, both having been built with the support of public money (IPCEIs, state aids). We therefore ask for a moratorium on scrapping industrial assets and forced redundancies that would lead to negotiated solutions for every site and worker. There should be an EU-wide SURE 2.0 funding mechanism like the one used during the COVID-19 pandemic.”
Demand-support schemes needed
The European car industry is squeezed between – on the one hand, green transition requirements, and – on the other hand, lower demand. IndustriAll Europe has been critical about the pursuit of profit maximisation and corporate strategies of European automotive companies. However, stimulating demand in Europe is key to exiting the crisis, but this runs counter to new EU fiscal rules which limit the scope for action.
Judith Kirton-Darling said: “Rebooting demand is therefore crucial and this means adapting the main obstacle to a public investment agenda in Europe – the Stability and Growth Pact (SGP). We need a golden rule to exempt clean transition spending from austerity rules, including purchase incentives for zero- emission vehicles. There is a need for targeted measures to support the purchase of zero-emission vehicles for low-income and middle-class households, along the lines of French social leasing.”
Investment with social conditionalities
Any support schemes must come with social conditionalities, according to industriAll Europe.
A recent OECD report on the future of the automotive supply chains shows that China, the US, and Mexico have been the top receiving countries of automotive investment over the period 2003-2022, followed by emerging economies, such as India, Brazil and Russia. European companies have also started to offshore knowledge intensive activities, including R&D, design and testing.
Judith Kirton-Darling said: “Reshoring investment is a prerequisite of building a European industrial strategy. The EU has a wide variety of tools that must be activated. However, it will be necessary to considerably strengthen social conditionalities when public funds are granted to private companies, particularly in the form of legally binding guarantees to maintain and create quality jobs in Europe with investment in the colossal upskilling and reskilling needed by 2030.”
Social conditionalities are vital to build social acceptance for a European industrial policy for clean mobility. It’s a new social contract.
IndustriAll Europe will closely monitor upcoming political changes and contribute to securing and developing good industrial jobs throughout Europe.