Automotive Regions Alliance urges EU support programme to ensure a just, fair and successful transition for a 7.5 million jobs industry

Europe’s automotive and supply industry is in a phase of upheaval and transformation: the EU’s climate targets with the “Fit for 55” package require a significant contribution in the road transport sector and thus have an impact on all automotive regions in Europe. The automotive industry is heavily affected by the green and digital transition, and 7.5 million people – equivalent to more than 6% of European employment overall – work in car manufacturing and automobile services. The transition towards zero-emission and digitalised vehicles will heavily impact the regional automotive eco-systems and socio-economic structures.

Twenty of the 29 member regions of the Alliance were represented in Leipzig and brought to the fore the concerns of the automotive sector of their regions. Based on the requirements of zero-emission cars in order to achieve the EU’s climate targets and the related changes in the car industry, the Alliance collectively advocates for the establishment of a European mechanism to support a just and fair transition in regions with an automotive industry in order to minimise the disruptive effects on employment and enhance the capabilities and opportunities for a technological re-qualification of the European automotive industry and continued global competitiveness in research and innovation.

Michael Kretschmer , Minister President of Saxony, opened the meeting and said: ” The automotive industry not only has its cradle here in Saxony, it is also a key technology for Germany. Thanks to outstanding expertise and a spirit of innovation, the Free State is developing into a centre for electromobility. Structural change and climate targets mean changes for Saxony and its automotive industry – which is why I am grateful to the Automotive Regions Alliance for enabling the exchange to successfully manage this transformation together. ”

Emil Boc, Mayor of Cluj-Napoca and Chair of the COTER Commission said that “Cities and regions can play an active part in facing the disruptions on the future of work on automotive sector. Together we can make this the story of adapting to the new economy with green and stainable transportation, skilled European work force and innovative vehicles, for mobility and agrotechnology. We need to see Europe as one place to tackle the changes we all know will impact this market. There is a future of cars in a clean, digital, inclusive and innovative Europe if knowledge is shared and infrastructure is created in all regions to ensure shorter supply chains, here in Europe, making automotive sector less dependent of global chain disruptions.”

The work of the Automotive Regions Alliance will focus on the evaluation of the regional impact of the transformation of the automotive and supply industry, support for reskilling and upskilling the regional workforce as well as the deployment of alternative fuels. Based on the 10-point declaration of the ARA, adopted at the plenary session of the European Committee of the Regions (CoR) in June 2022, the alliance backs the commitment to drastically reduce greenhouse gas emissions from road transport and demands the just transition framework to ensure economic and social cohesion in every European automotive region. To this end, the framework must include budgetary and policy support measures and lead to joint transition planning at the regional level.

This key demand must be achieved, the Alliance argues, through territorial impact assessments addressing common challenges and opportunities for regions, OEMs (Original Equipment Manufacturers) and especially SMEs active in the automotive supply chain industry, and should support the reskilling and upskilling of the regional workforce and monitor the supply and demand of relevant skills.

María Chivite (ES/PES), CoR member and President of the Regional Government of Navarre, stated: ” To implement a just transformation we are emphasising training in Navarra. In addition, with active employment policies, we are addressing the challenge of requalification. Because we care about employment. But we are also concerned about adapting profiles so that digitisation does not create a social and labour gap that implies job losses and inequalities. European Next Generation funds are an opportunity, as we understand it, must be a commitment for the coming years with specific financing to address the transformation of the automotive industry. ”

Further demands of the alliance are the development of a strong research framework for industrial transformation and innovation in the European automotive industry, providing flexibility in state-aid guidelines to enable automotive regions to guide and manage this transformation and support regions to deploy publicly accessible refuelling and recharging stations. This will promote the take-up of zero-emission vehicles and concentrate available public and private investment funds on the various technological solutions (e.g., electrification, hydrogen technologies and synthetic fuels) to ensure the European automotive industry’s competitiveness and innovation.

Background:

The Automotive Regions Alliance (ARA) is a political network of regions with a strong automotive and supply industry sector which will be affected by the transition towards zero-emission road transport. It was launched by the European Committee of the Regions during its plenary session in June 2022 to ensure a just and fair transition in the automotive and supply industry. The Alliance is an open forum for all regions affected by the transformation. Currently it has 29 member regions.

The European Union’s goal of reducing emissions in the EU by at least 55% by 2030 includes the EU Commission’s regulation to reduce CO2 emission standards for passenger cars and light commercial vehicles. A recent proposal by the European Parliament to ban cars with combustion engines at EU level from 2035 onwards, adopted on 8 June 2022, will result even more in changes in the European automotive and supplier industry. The goal of the Automotive Regions Alliance therefore is to ensure that the transition in the automotive sector is fair and successful leaving no region behind while fully supporting the EU’s climate goals.