FINAL Automobile Pour OIB

European Commission

Automotive industryComprehensive analysis of the evolution

of the automotive sector in Europe

European Commission

Directorate-General for Employment, Social Affairs and Equal OpportunitiesUnit F3

Manuscript completed in 2009



Executive Summary

The full study is available under the linkhttp://ec.europa.eu/restructuringandjobs

Submitted to the European Commission, DG Employment, Social Affairs and Equal Opportunities

Executed by: Groupe ALPHAAlphametrics

DG EMPL project VC/2007/0266Automotive industry

This publication is commissioned under the European Community Programme for Employment and Social Solidarity - PROGRESS (2007-2013).

This programme is managed by the Directorate-General for Employment, social affairs and equal opportunities of the European Commission. It was established to financially support the implemen-tation of the objectives of the European Union in the employment and social affairs area, as set out in the Social Agenda, and thereby contribute to the achievement of the Lisbon Strategy goals in these fields.

The seven-year Programme targets all stakeholders who can help shape the development of appro-priate and effective employment and social legislation and policies, across the EU-27, EFTA-EEA and EU candidate and pre-candidate countries.

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1. providing analysis and policy advice on PROGRESS policy areas; 2. monitoring and reporting on the implementation of EU legislation and policies in PROGRESS

policy areas; 3. promoting policy transfer, learning and support among Member States on EU objectives and

priorities; and4. relaying the views of the stakeholders and society at large

For more information see: http://ec.europa.eu/employment_social/progress/index_en.html

The information contained in this publication does not necessarily reflect the position or opinion of the European Commission.

photos 123RF For any use or reproduction of photos which are not under European Communities copyright, permission must be sought directly from the copyright holder(s).

European Commission

European Commission

Directorate-General for Employment, Social Affairs and Equal OpportunitiesUnit F3

Manuscript completed in 2009



Executive Summary

The full study is available under the linkhttp://ec.europa.eu/restructuringandjobs

NOTE: The study conducted in the end of 2007/beginning of 2008 was a pilot one. It served as a test for the methodology that was subsequently used (in an improved way) in all the other 17 sectoral studies. On the other hand, unlike the other ones that fo-cussed mainly on the skills issue, the main purpose of the Automotive Study was to sup-port the European Partnership for the Anticipation of Change in the Automotive Sector (see http://www.anticipationofchange.eu/fileadmin/anticipation/Logos/EU_partner-ship_en.pdf) that was signed by the European Commission and the main organisations of the sector (employers and trade unions) and presented in the Automotive Forum of October 2007 (see http://ec.europa.eu/social/main.jsp?catId=782&langId=en&eventsId=168&furtherEvents=yes). This Partnership is being developed by the partners through a two-year Work Programme that includes also actions on anticipation of skills needs (see http://www.anticipationofchange.eu/). Finally, it must be underlined that the study has been finalised before the emergence of the current economic crisis. Even if it describes the structural adjustments that the industry and their workers face, it does not take into account the effect of the downturn on the sector, significantly more severe and brutal than in any of the other sectors analysed.

Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be made of the information contained in this publication.

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Reproduction is authorised provided the source is acknowledged.

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3Education and training, in the context of a life-long learning perspective, are an indispensable means for pro-

moting adaptability and employabi-lity, active citizenship, personal and professional fulfilment.

Investment in human capital through better education, and the development of skills and compe-tences should be increased. It is important to anticipate skills needs and also skills gaps which are emerging in the European labour market, as well as to improve the matching of knowledge, skills and competences with the needs

of society and the economy, as a means to increased competitive-ness and growth, as well as to greater social cohesion, in Europe.

This is more important than ever in the current situation of crisis that will undoubtedly lead to substan-tial changes in economic activities in Europe coming years.

With this in mind, the Commission has elaborated a set of analysis of emerging competences in 18 sec-tors. Those analysis are available to all economic, social and profes-sional organisations, educations and training institutions, etc. They can help them to refine their stra-tegies and to engage into forward-looking actions.

Preface

Robert Verrue

Director-General, Employment, Social Affairs and Equal Opportunities DG

Automotive industry

4

The renewed Lisbon strategy and European Employment strategy stress the need for Europe to place more emphasis on a better antici-pation of skill needs together with the need to reduce labour markets mismatches. These policies aims also at minimising social costs and facilitating adaptation during restructuring processes through a better anticipation and positive management of change. Globalisa-tion, technological change, climate change and demographic develop-ments (including ageing and migra-tion) in that respect pose huge chal-lenges, comprising both risks and opportunities. In that context, the Commission has launched recently the New Skills for New Jobs initiative together with other related Euro-pean projects aimed at identifying future job and skills needs using quantitative modelling approaches. While having advantages of robust-ness, stakeholders as well as the European Commission identified a clear need for complementary more qualitative forward-looking analy-sis. Consequently, the European Commission commissioned in 2007 a series of 18 future-oriented sector studies (horizon 2020) on skills and jobs following a uniform, qualita-tive methodology. Results of these studies have become available in summer 2009, and will be followed

by a number of other initiatives over the oncoming year and beyond. The current economic crisis calls for the reinforcement of policies aimed at developing the employability of the workforce. This project fits within this policy objective.

18 sector studies, one methodology

The results of this study aim to serve as a guide in launching further EU and other actions to promote the strategic management of human resources and to foster stronger synergies between innovation, skills and jobs, taking into account the global context and encourag-ing adaptations to national and regional level.

To validate, add and complement the findings of the project and to make sure that results are dis-seminated as broadly as possible across Europe, relevant stakehold-ers including European social part-ners, other services from the Com-mission with the expertise in the sectors analysed, representatives from the European Parliament, the European Economic and Social Committee, the Committee of the Regions, Eurofound and Cedefop were involved in the project from the beginning.

Aims and methodology

5Aims and methodology

A standard predefined methodo-logy was developed by a panel of experts under the direction of Prof Maria Joo Rodrigues and applied to all 18 studies to ensure consis-tency and comparability of the results, the studies being produced by different contractors.

Based on the basic methodologi-cal framework, each contractor executed 7 defined steps, starting with the mapping of main trends, key drivers of change, leading to scenarios of plausible evolution and their implication for employ-ment at the year 2020 time horizon, the identification of implications

for emerging competences and occupation profiles in terms of jobs expanding, transforming or declining, and their implications in terms of strategic choices and subsequent recommendations for companies, education and trai-ning systems, social partners and public authorities at all levels. This foresight methodology implies an approach combining desk research and expert knowledge.

At the end of each sector study a final European workshop for the sector was organised by the Com-mission to validate results as well as refine recommendations. In

Sectors CoveredAutomotive industryDefenceTextiles, wearing apparel and leather productsPrinting and publishingChemicals, pharmaceuticals, rubber and plastic productsNon-metallic materials (glass, cement, ceramic)Electromechanical engineeringComputer, electronic and optical productsBuilding of ships and boatsFurniture and othersElectricity, gas, water & wasteDistribution, tradeHotels, restaurants, catering and related servicesTransportPost and telecommunicationsFinancial services (bank, insurance and others)Health and social workOther services, maintenance and cleaning

Automotive industry

6

addition to European Commis-sion and Eurofound staff, about 20 experts per workshop from indus-try, academia and sector organi-sations including workers and employers representatives with a sound knowledge of jobs and skills were invited to comment and provide recommendations to the report as part of the methodology.

Brief description of the methodological steps

Mapping

The main purpose of this analy-sis was to provide factual back-ground to identify key drivers used in the subsequent scenario development. Consequently, the Report analysed recent sector developments and trends and, at the same time, depicts the current state of play in the sector with an emphasis on innovation, skills and jobs. It was based on an anal-ysis of available time series data and relevant existing studies. It analysed 1) structural character-istics (production, value added, employment in various dimen-sions, and related factors); 2) the value chain; 3) technological change and innovation; 4) trade and international competition as well as 5) regulation. The results

of all sections were summarised in a SWOT analysis and were used as input to identify key drivers.

Drivers of change

On the basis of the mapping of the sector, a set of key drivers, sector specific or not, was identi-fied. Literature review and expert knowledge of the sector were then used to define a conclu-sive list of sector-specific drivers. Drivers were classified as exo-genous or endogenous depen-ding on the ability for the sectors stakeholders and policymakers to influence them. These lists of drivers were also discussed in the experts panel workshops.

Qualitative scenarios and impli-cations for employment trends

The set of selected sectoral drivers of change served as an input to develop scenarios for the evolution of the sector and implications for different occupations (composition of employment / emerging compe-tences) in the period 2008 to 2020.

Implications of scenarios and emerging competences

Scenarios were built to assess the implications for the level (absolute

7Aims and methodology

demand) and composition (relative demand compared to other job functions) of employment of dif-ferent job functions by 2020. New and emergent skills required by dif-ferent job functions were identified based on the analysis of the evolu-tion of past data on employment by occupation, on the analysis from the present situation and of experts comments during the workshop. The focus was on identifying and describing key and critical com-petences for the future for each of the major occupational function in relation to the different scenarios elaborated. These formed the basis for the strategic choices identified in a next step.

Strategic choices for companies to meet emergent competence needs

Each sector study assessed possible strategic choices in terms of feasi-bility and actor involvement. The options comprised recruiting work-ers from other sectors, countries, recruiting graduates, re-training employed workers as well as chang-ing work organisation.

Specific implications for education and training

Options to improve or to adapt education and training systems

were looked at in this step of the methodology, focussing more particularly on the specific role to be played by sectoral organi-sations, educational institutions and governments such as a stron-ger cooperation between stake-holders or an increased flexibility through modularisation of educa-tion and training.

Recommendations

Each sector study contains spe-cific recommendations to the sector. However, with the studies analysing Europe as a whole, the recommendations remain ge neral and need a follow-up at the national and regional level. The intention of the project especially in the follow up phase is to use the results to stimulate stakeholders at lower territorial levels (national / regional) to work out results in more details, repeat and adapt this exercise to local needs rather than providing standardised solutions. Some general recommendations call for an intensified co-operation between relevant stakeholders, the need to invest strongly in human capital, more standardised regu-lations, enhanced VET to increase social mobility and coordinated National and European Vocational Qualifications.

Automotive industry

8

The concern of this study is to present an overview of the Euro-pean automotive industry 1 and the

1 The automotive industrys NACE code [European activity code] is 34.00

changes which have occurred over recent years and to consider the potential developments over the next few years and their implica-tions for jobs and skills.

Objectives of the study

Main economic and employment trends

The automotive industry accounts for around 1.5% of GDP in the EU and employs just under 2.4 million people, around 6.5% of the total employed in manufacturing or just over 1% of total employed in the EU economy as a whole. If jobs in industries and services supplying the automotive industry are taken into account, employment is increased by 3-4 times. In Germany, the industry is directly responsible for 2.4% of all jobs in the economy and 13% of all jobs in manufacturing.

Over the past decade, both the share of value-added and employ-ment in the industry have risen

slightly across the EU as a whole, but this disguises marked shifts in the relative importance of the industry in different Member States (Table 1). Between 1995 and 2006, employment in the industry is esti-mated to have increased by 23% in the EU, though by less in the EU15 countries and much more in the new Member States. In 2006, the latter accounted for some 19% of the total employed in the industry in the EU as opposed to under 14% 11 years earlier. Whereas the Ger-man share of employment rose to 39% of the total over these 11 years, that of other EU15 Member States fell from 51% to 41%.

9Main economic and employment trends

Table 1 Employment in the automotive industry in the EU, 1995-2006

1995 1997 1999 2000 2001 2002 2003 2004 2005 2006

Number employed (000s)

EU27 1 927 2 033 2 158 2 206 2 255 2 250 2 254 2 347 2 295 2 360

EU15 1 661 1 746 1 847 1 870 1 912 1 893 1 903 1 978 1 915 1 906

DE 674 702 762 769 806 833 844 923 910 930

Other EU15 987 1 044 1 145 1 108 1 105 1 060 1 060 1 055 1 005 976

New MS 266 287 311 336 343 357 351 368 380 454

% employed in automotive industry in EU

EU27 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

EU15 86.2 85.9 85.6 84.8 84.8 84.1 84.4 84.3 83.4 80.8

DE 35.0 34.5 35.3 34.9 35.8 37.0 37.4 39.3 39.6 39.4

Other EU15 51.2 51.4 53.0 50.2 49.0 47.1 47.0 45.0 43.8 41.4

New MS 13.8 14.1 14.4 15.2 15.2 15.9 15.6 15.7 16.6 19.2

Change in employment (1995=100)

EU27 100.0 105.5 112.0 114.5 117.0 116.8 117.0 121.8 119.1 122.5

EU15 100.0 105.1 111.2 112.6 115.1 114.0 114.6 119.1 115.3 114.8

DE 100.0 104.1 113.1 114.0 119.6 123.6 125.1 136.9 135.0 137.9

Other EU15 100.0 105.8 116.0 112.3 112.0 107.4 107.4 106.9 101.9 98.9

New MS 100.0 108.0 117.1 126.2 129.0 134.1 131.9 138.4 142.9 170.6

% Total employed in each group/country

EU27 1.0 1.0 1.0 1.0 1.0 1.0 1.1 1.0 1.0 1.1

EU15 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1

DE 1.8 1.9 1.9 2.0 2.0 2.0 2.1 2.1 2.2 2.4

Other EU15 0.8 0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.7 0.7

New MS 0.6 0.6 0.7 0.8 0.8 0.9 0.8 0.9 0.9 1.0

Automotive industry

10

The majority of those employed in the automotive industry in the EU15 countries are manual wor-kers (around 60% in total), most of them employed in skilled or at least semi-skilled jobs, though the rela-tive importance of skilled workers varies across countries. In the new Member States, the figure is closer to 70%, most of them semi-skilled. Most of the others in employment are trained professionals or tech-nicians, many of them engineers (Table 2).

The relative number of en gineers and as other specialist pro-fessionals and technicians increased between 2000 and 2007 through-out the EU, while the number employed as skilled manual workers, especially as mechan-ics, declined. This decline was es pecially large in the new Mem-ber States, where it was accompa-nied by a counterpart increase in the number of machine operators and production line workers (i.e. semi-skilled manual workers).

11


% Total employed in the industry

EU15 DE FR IT NewMS

2000 2007 2000 2007 2000 2007 2000 2007 2000 2007

Manager 4.5 5.2 3.5 4.3 2.7 4.8 2.6 2.8 1.8 3.3

Production 2.0 1.8 1.5 1.7 1.2 1.6 2.2 0.4 0.9 2.0

Other 2.5 3.4 2.0 2.7 1.5 3.2 0.5 2.4 1.0 1.3

Professionals 19.9 25.8 23.2 27.9 23.2 30.0 12.7 25.9 9.3 18.8

Engineers 12.3 15.2 13.0 15.7 18.4 22.6 7.6 14.0 3.9 8.5

Computer specialists

1.3 1.6 1.5 1.6 1.3 2.0 1.1 1.4 0.7 2.0

Other professionals

6.3 9.0 8.7 10.6 3.4 5.4 4.1 10.5 4.8 8.3

Business, finance, sales

2.2 3.2 2.5 3.9 1.5 1.7 1.9 2.7 1.1 1.6

Other 4.1 5.8 6.3 6.7 2.0 3.7 2.2 7.9 3.7 6.7

Office workers

8.0 7.4 8.5 8.3 5.5 6.4 12.8 8.8 2.8 5.0

Sales + Service workers

0.8 0.8 0.9 1.1 0.4 0.5 1.2 0.7 0.7 0.3

Skilled manual workers

33.8 29.1 41.9 34.4 32.8 30.0 22.1 19.9 18.6 25.4

Metal moulders

7.7 6.6 8.8 6.7 5.5 3.7 7.1 6.3 2.7 8.3

Tool makers 5.2 4.5 6.9 6.0 5.8 4.7 1.3 2.2 8.5 6.7

Mechanics 12.3 9.4 13.1 11.0 15.5 8.8 11.2 6.8 4.0 5.3

Electricians + others

8.5 8.6 13.1 10.7 6.0 12.8 2.6 4.6 3.5 5.1

Semi-skilled workers

26.3 25.2 15.1 16.1 32.9 25.5 43.1 35.5 13.4 44.8

Production line

23.7 21.9 12.8 13.5 29.4 20.3 40.5 34.4 12.0 41.7

Drivers 2.6 3.3 2.2 2.5 3.5 5.3 2.7 1.2 1.4 3.2

Low-skilled workers

6.6 6.6 7.0 8.0 2.5 2.8 5.4 6.4 3.3 2.3

Source: EU Labour Force SurveyNote: The figure for 2000 represent an average of those for 1999 and 2000 and the figures for 2007, an average of those for 2006 and 2007 in order to smooth fluctuations in the LFS data

Table 2 Employment in the automotive industry by occupation, 2000 and 2007

Automotive industry

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In terms of production, European manufacturers account for around 20 million vehicles each year, or 33% of total world output, less than producers in Asia/Oceania but more than those in North America, so attesting to the competitive-ness of Europes automotive indus-try. The strength of the European industry has principally been due to its ability to adapt to a series of major changes over the past 20 years: two oil crises, several sub-stantial regulatory changes, tech-nological advance, EU enlargement and global competition (nota-bly from Japan). The adaptations concerned have been associated with major consolidation of OEMs, increased outsourcing, restructur-ing and relocation both within the EU and to neighbouring countries. Despite its relative strength, there are weaknesses in certain parts of the industry (Table 3):

because of slow growth of the West European market, manufac-turers need to invest substantially

in product differentiation, which leads then in turn to expand into international markets in order to achieve larger sales volumes. While specialist manufacturers are well placed to face interna-tional challenges, it is more diffi-cult for generalist manufacturers;

competition from low-cost manufacturers has become a major challenge. Pressure is passed on from OEMs to equip-ment manufacturers, whose share of the industrys added value has risen over the past 20 years. Over this period, Euro-pean equipment manufacturers have become world leaders, but faced with increasing require-ments and pressure to contain prices, they are currently in a difficult situation. Since they account for the bulk of jobs in the industry, the difficulties they face have serious implica-tions for employment across the EU, especially in the major car-producing countries.

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STRENGTHS WEAKNESSES

OEMs Broad range of models and excellence in high-end segment

Diesel technology expertise

Strong financial situation (compared to US)

Relatively flexible value chain

Small size of OEM generalists

Weak capacity in hybrid technology

Relatively weak internationalisation, especially R&D

Equipment suppliers Highly innovative and leadership position in numerous segments

Internalisation of sales and production

Declining operating income and weak financial structure

Threat from US and Japanese investment funds

Extreme weakening of the small supplier network

Regional and political aspects

Emerging regional system (production, school, innovation clusters)

Advanced regulatory framework

Many differences in fiscal conditions

Non-integrated EU market

Regional competition versus complementary networks

Regulatory policy of little importance in international trade negotiations

Coordinated export policy

Jobs High level qualifications (even in new Member States)

High productivity

Strong automotive culture

Social model

Weak culture of change and mobility

Ageing population

Short supply of skilled labour

Table 3 SWOT analysis of the European Automotive Sector

Automotive industry

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Main drivers of change

There is significant potential for growth in the automotive industry both generally in the world and in Europe in particular. Driven by the needs of emergent economies (Chi-na, India, Russia), new actors are entering the global market, inten-sifying competition in the more mature European markets as well as in emergent ones.

Four major drivers are important for the future of the European automo-tive industry:

Changing society and evolu-tion of demand: the need for mobility remains high in mature economies and increases in emer-gent ones, but is accompanied by new pressures and aspirations: environmental concerns, urbani-sation, demand for differentia-tion, increased energy prices. The car becomes less a prized posse ssion more a means of transport (which increases competition with other modes, especially in cities, and raises the importance of user costs).

Emerging technology: the car industry has always been one of the most innovating sectors and is likely to be even more so in the future. Three areas of technology are particularly important: elec-tronics and ICT, new composite materials and new, non-fossil fuel forms of propulsion.

Company strategies: the Europe-an industry is composed of inter-nationally-recognised specialist manufacturers and large general-ist ones less involved in exporting. The pace of internationalisation of the latter will be important in com-petition with low cost producers outside Europe as will be the range of models they can offer and the innovations incorporated in them.

Policies of regulation: such poli-cies include fiscal measures as well as the regulatory framework as such and affect both the supply side, by imposing, for example, limitations on CO2 emissions, and the demand-side by raising prices, as well as stimulating new technologies.

15

Scenarios and implications for employment


Changing society and evolution of demand

Need for mobility

Greater diversity

Rich versus poor

Urbanisation

Ageing population

Pressure from energy prices

Emerging technology

ICT (incl. nanotechnology)

New materials

New propulsion (hydrogen, fuel cells)

Company strategies

Internationalisation

Mergers and acquisitions

Marketing choices (premium, low cost, )

Innovation versus cost oriented policy

Relocation

Changing regulation (fiscal, RD policy, regulatory framework)*

Environmental friendliness (incl. interoperability), fuel consumption and emissions, safety, fiscal policy, Eco taxes, R-D incentives

* These factors interact with the three above.

Table 4 Drivers of change in the automotive industry

The response of the European indus-try will depend on its dual capa city to innovate and to expand into global markets. These are major challenges, notably for general-ist and equipment manufacturers. A pessimistic scenario: Reduced

attractiveness of advanced pas-senger cars, demonstrates the risk of failure, which would mean a significant increase in the low-cost vehicle share of the market, leading to major restructuring and relocation of production.

Automotive industry

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An optimistic scenario: New cars for safe and sustainable transport demonstrates the

opportunities for an industry that implements major innovations and has export success


Price sensitive demand

Premium cars only for enthusiasts

Low demand for multimodal transportation

Little consideration for environmental aspects

Slow growth of EU market

Emerging technology

Lack of innovation except in premium cars

Company strategies

Internationalisation and partnership with emergent car manufacturers

Development of low-cost car ranges

Consolidation and relocation of equipment manufacturers


Little coordination in EU of Environmental, Safety and Transportation policies

Lack of investment in R&D and in new technology

Uncoordinated, defensive fiscal policy promoted by Member States


High environmental and safety considerations

Increasing prosperity in new Member States especially

Demand for new technology, design and services

Emerging technology

New technologies (material, electronic, propulsion)

New designs

New services (including transportation services)

Company strategies

Internationalisation

Partnership between car and equipment manufacturers

Investment and RD expenses

High level of segmentation

Growth in services activity


High level of coordination in EU on Environmental, Safety and Transportation policies

Investment in R&D and new technology but also in transport infrastructure

Coordinated fiscal policies promoted by Member States

Table 5 Reduced attractiveness of advanced passenger cars scenario

Table 6 New cars for safe and sustainable transport scenario

17


Both scenarios probably involve significant short-term job loss-es in the EU15, since these are already in the pipeline as a result of the massive relocation of ge neralist manufacturers to Central European countries and neighbouring countries.

The optimistic scenario differs in the medium-term since industry capa-city expands and there is large-scale innovation by generalist manufac-turers which increase exports to the rest of the world. This benefits equipment suppliers and confirms their world leadership position.

Less attractiveness of automotive industry

New cars for safe and sustainable transport

OEMs Generalist: massive restructuring- consolidation, hostile takeover risk Specialist: continuing in niche segment and export markets

Generalist: restructuring through mergers/acquisitions and purchase of new activities- opportunity of joint ventures with

Asian partners- innovation and cost strategies - new form of cooperativeSpecialist: continuing in niche segments and export markets

Equipment suppliers

- Major restructuring: closure and voluntary liquidation

- Consolidation with newcomers from emerging countries

- Hostile takeover risk

- Regrouping of major system manufacturers through external growth

- Creation of hierarchy of value chain systems, modules, components

- Relocation of component manufacturers

- creation of large component suppliers

Regional - Major problems for EU 15, incl. Germany

- Temporary resistance of new Member States

- Improvement of transport conditions

- Specialisation in Europe around high-innovation car design centres

- New Member States: leading equipment manufacturing area

Jobs - Restructuring- Major decline of car industry

activities in Europe

- Restructuring, but also creation of jobs

- Major training needs- Major need for qualified labour in

both EU15 and new Member States

Table 7 Summary of the impact of the two scenarios on the industry

Automotive industry

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Implications of scenarios for jobs, skills and knowledge by job function

+20%

+10%

+5%

-5%

-10%

-20%

2008level

Short term: Uncertain trends

Long term: Uncertain range

impact

New car

Reduced attractiveness

Graph 1 Evolution of employment in automotive industry according to the two scenarios

Source: ALPHA - Alphametrics

The broad trends evident in the structure of the industry across the EU in particular, the shift towards the new Member States and in the composition of occu-pations, with the growth of engi-neering and other higher level jobs, are likely to continue over the next 5-10 years. This is likely to be the case under each of the different scenarios, though to varying extents and with differing

implications for the scale of future skill requirements.

There are unlikely to be new kinds of job emerging as such but exist-ing jobs will tend to change in terms of the skills and compe-tences required and the relative importance attached to these. The skills in question are likely to mean a continuing shift in employment towards:

19

Implications of scenarios for jobs, skills and knowledge by job function

Engineers (skilled in design, the development of driver aids and emission controls)

Marketing professionals (to develop new European and export markets)

Business professionals and accountants (to maintain price competitiveness)

Electrical mechanics (for the increasing use of electronic equipment and devices)

Managers (to organise increasingly complex operations and to locate activities in the lowest cost places)

An increase in the numbers employed with these skills is likely to be a necessary condition for the optimistic scenario to become a reality. But this requires the indus-try to be sufficiently attractive to enable companies to recruit peo-ple with the relevant skills, which depends in turn on the prospects for growth in the industry.

At the same time, jobs for mechanics, tool makers and other skilled work-ers as well as for less skilled machine operators on production lines are set to decline. This is not the case in the new Member States, to which labour-intensive activities are likely to be increasingly relocated.

Despite the reduction in skilled manual jobs, companies could still face recruitment problems because of the need to replace the significant number of workers due to retire in the next few years. This they will need to do in a context of fewer young people entering the labour market.

The ability of the industry to meet prospective skill needs, therefore, depends only partly on the output of education and training systems across Europe. It depends equally on the success of measures to attract qualified people into the industry, on making effective use of the existing workforce and on ensuring that training is provided to update and extend their skills.

Automotive industry

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Table 7 Implications of scenarios for occupations in EU15 and new Member States

Base scenario Growth (or Green) scenario

Occupation EU15 NMS EU15 NMS

Employment in general - + - ++Manager + + + +Production + +Other + +Professionals + technicians + +Engineers + + ++ ++Computer specialists + +Other professionals + +Business, finance, sales (marketing)

+ + +

Administrative + other - +Office workers - - - -Sales + Service workers

Skilled manual workers - - - -Metal moulders - - - -Tool makers - - - -Mechanics - - - -Electricians + others + + + ++Semi-skilled workers - ++ - ++Machine operators - ++ - ++Drivers - ++ - ++

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Recommendations for the optimistic scenario

Policy area Stakeholders concerned Examples of action

Policy for major innovation

Car manufacturers, suppliers, research centres, universities, EU authorities, Member States

- establish better cooperation between car manufacturers and suppliers

- develop a European Research Programme

- provide support for Innovation clusters and for SMEs

Coherent regulatory policy

EU authorities, Member States

- pursue an integrated approach on regulatory and trade policy

- introduce fiscal incentives harmonised between EU countries

Infrastructure policy

EU authorities, Member States

- develop new intelligent road systems- promote public/private partnerships- provide financial support for SMEs

Education, training and social policy

Car manufacturers, Suppliers, education and training institutions, EU authorities, Member States, Trade Unions

- make the sector more attractive to potential recruits

- involve companies more in training and education programmes and encourage closer relations with schools and universities

- special programmes for older skilled workers - improve working conditions- develop social observatories at territorial

and sector level - establish effective social dialogue at

company level and promote European Works Councils and social agreements

Table 8 Main recommendations by policy area for the optimistic scenario

Recommendations for the optimistic scenarioThe European automotive indus-try has major assets which should contribute to ensure its sustain-ability and growth. In the coming years, far-reaching changes are likely, in the short-term, in output and employment location, in the

longer term, in skills and compe-tencies.

The optimistic scenario is dependent on several policies being adopted (on innovation, regulation, transport infrastructure and human resources).

Automotive industry

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Given the challenges of the coming years with continuing restructuring combined with the emergence of new skills, two areas of policy are likely to be of particular importance:

Human resources, including con-tinuing trainingSocial dialogue

Aprimaryimplicationoftheoptimisticscenarioisthatthereisanimportantneedtomake the industry more attractive to potential recruits who have other career options.

Thisappliesinparticulartouniversitygraduatesinengineeringandotherrelevantfieldsof study likely to be deterred by a belief that the industry is set to decline in future years.

Itappliesequallytothosewhohavecompletedvocationaltrainingorwhoaredecidingwhich education or training programme to follow.

Thereisapriorneedtoensurethatsufficientnumbersacquiretheskillsandcompetences required by the industry and that education and training systems across the EU are equipped to teach these.

Itis,accordingly,importantforcompaniesintheindustrytobeinvolvedintheprovisionof education and training, to have close links with schools, technical colleges and universities and to advise on the content of programmes.

Asimilarneedextendstocontinuingvocationaltraining,whichisessentialforworkersto extend and update their skills as requirements change but which evidence suggests is inadequate in many parts of the industry at present.

Ifgrowthoftheindustryistobeachieved,thereisequallyaneedtoslowdowntherateof exit of older skilled workers given the increasing difficulties of replacing their skills as falling numbers of young people enter the labour market.

Moreconsiderationcouldalsobegiventothepossibilityofmakingmoreproductiveuseof older workers to help train new entrants to the industry so that they are able to pass on their skills and know-how.

Moreconsiderationneedsequallytobegiventowaysofattractingmorewomenintothe industry, who, as in the past, will represent the main source of labour force growth in future years but who remain an under-utilised resource.

Toattractmorewomenislikelytorequirechangesinworkorganisationtoaccommodate their need for flexible working arrangements so that they can balance employment and family responsibilities.

Table 9 Human resources policy implications of the optimistic scenario

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Recommendations for the optimistic scenario

Anticipation of likely future changes in the automotive industry is important to limit their impact and to prevent them adversely affecting the attrac-tiveness of the sector to potential recruits. The European Partner-ship for anticipation in the auto-motive industry is potentially an important step forward which could contribute to anticipation

at three levels:

At the regional level, through regional research centres and competitive clustersAt the sector level, through indus-try monitoring centres At company level, through expanding the role of European Works Councils and social agree-ments within companies

Where to find more information?

The following information can be found on the Europa website under the address: http://ec.europa.eu/restructuringandjobs

The other 17 sector studies on the analysis of the sectors evolution and future skills needsThe Restructuring in Europe report The thematic restructuring forums

The checklist and the toolkit on restructuring processesThe training guide for SMEs

The national seminars on restructuring in 27 EU countriesOfficial documents related to restructuring policies

FINAL Automobile Pour OIB

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