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Scenarios for European Industrial Policy

Speaking at the "Turin meets the future of the European car" conference, Commission Vice-President Martin Bangemann, whose portfolios include Directorates-General III (Industry) and XIII (Telecommunications, Information Market and Exploitation of Research), focused his interve...
Speaking at the "Turin meets the future of the European car" conference, Commission Vice-President Martin Bangemann, whose portfolios include Directorates-General III (Industry) and XIII (Telecommunications, Information Market and Exploitation of Research), focused his intervention on scenarios for European industrial policy.

Expressing his belief that the European automobile industry is still strong, Mr. Bangemann also pointed out that the industry faces at present the combined effects of a severe downturn in demand and increased pressure from manufactures with a lower cost base outside the EC, on the European market and on export markets. Leading up to his discussion of proposed policy changes, he briefly summarized market evolution, the issue of overcapacity, expansion into third markets and the general transport environment in Europe.

Mr. Bangemann's presentation of policy changes covered three main axes:
- The need for better road infrastructure and integrated transport networks;
- The advantages of road pricing;
- The necessity for adaptations for the car of tomorrow.

Mr. Bangemann also insisted that the European car industry must continue its restructuring process, all the more essential since Japanese manufacturers are reacting to recent monetary development by delocalizing their production. These restructuring efforts should aim at creating a leaner production system (investment in new plants and equipment, further automation and optimization of production, internal organization changes).

Equally important, studies have shown that EC-component manufacturers' efficiency is lagging considerably behind that of their Japanese competitors. The tendency of car manufacturers to increasingly source outside their own country, will soon show who is efficient and who is not. This in turn will lead to large-scale restructuring of the industry. Mr. Bangemann also stated that the social partners in the industry are to some extent responsible for the handicaps from which the car industry is now suffering.

The importance of research and technological development in making the European motor vehicle industry more competitive was stressed. Of benefit to the car industry, the specific programmes (within the Fourth Framework Programme) for industrial technologies and for information technologies plan research on advanced propulsion systems, and will cofinance research on microelectronics for cars and on clean and efficient energy technologies.

In conclusion, Mr. Bangemann insisted that, although retraining the workforce was important, ever-increasing productivity in an industry with a falling growth rate makes cuts in the workforce inevitable. He suggested that a reduction of working hours can be a way to reduce the social costs of restructuring and rationalization. The introduction of new working patterns must be used to achieve higher flexibility, increase overall efficiency and reduce production costs.

Source: Commission, Service du Porte-Parole, Press Release

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