The Council adopted a Resolution on the automobile industry on 31 May 1994. In adopting the Resolution the Council outlines the necessary relationship between public initiatives and competitiveness in the automobile industry. The European Union's approach to industrial policy centres on the completion of the internal market, the application of competition rules, the use of horizontal policy instruments in the use of research and development and the Structural Funds, as well assuring equal access to markets and fair competition on a global scale. Strong efforts in the field of research and development, particularly in the areas of product, process and production technology are vital for the future competitiveness of the automobile industry. In this Resolution the Council also recognizes that the introduction of new technologies within the automobile industry depends on the availability of people with the relevant skills, which may entail the retraining of sectors of the workforce at all levels. The Council recognizes that the European Union has an important role to play in creating a favourable business environment for the automobile industry. It also has responsibility to establish an appropriate framework for the future, as well as providing a coherent approach to the development, production, distribution and use of the automobile and its impact on the environment and on society as a whole. The Council underlines the growing importance of component manufacturing and the further development of out-sourcing of systems and components production to suppliers within the automobile manufacturing value-added chain, which is essential to increase the competitiveness of the automobile sector as a whole. The Council emphasizes that public policy in the field of RTD must be optimized through effective coordination of EU, national and EUREKA programmes and projects. Concerning Community programmes and the Fourth Framework programme, a strengthened dialogue with appropriate industrial panels and better coordination and consultation between individual research programmes should be achieved. This would produce the best long-term return on RTD investment in terms of sustained industrial competitiveness throughout the automobile industry. The Commission should encourage, within the horizontal industrial policy framework adopted by the Union, the structural adjustment process of the automobile industry which is vital for its improved competitiveness. The Council invites the Commission to: - Coordinate and organize its RTD programmes to cover themes relevant to improved competitiveness; to facilitate access to these programmes for component suppliers, in particular SMEs, as well as increasing their participation in consortia with vehicle manufactures; to improve the dissemination of research results and to facilitate industry planning in this sphere by presenting a clear view of the possibilities for funding several programme activities. In this context the dialogue with industry should be further developed. - Encourage industrial cooperation by SMEs in the components sector both among themselves and with the vehicle manufactures in order to improve the exploitation of R&D results to obtain new products and to strengthen improvement in production procedures and working methods which are areas where European industry is at a competitive disadvantage.