EU: insight into the impact of social dialogue on the management of the crisis in the automotive sector

Globalization. Eurofound’s first observation is merciless: between 2008 and 2009, worldwide automotive output dropped by nearly 17%. This recession was only felt in the EU (-9%) and in the US (-20%), while India and China weren’t at all affected. The study shows that the automotive industry being highly globalized counterbalanced somewhat the impact of the crisis. Indeed, “As traditional markets decline to the benefit of emerging markets, such market shifts will probably further sustain the globalization of the automotive industry and provide the opportunity for a general reorganization of production chains and clusters” the author wrote.  Thus, the report shows that the recession has already led to restructurings, the rebalancing of production and new global partnerships: the acquisition by Fiat of a controlling minority stake in Chrysler; the acquisition of Volvo by Geely, a Chinese manufacturer.  In the last two years, there have been several partnerships between large international manufacturers and Chinese businesses: General Motors (with SAIC), Volkswagen (SAIC and FAW), Toyota (FAW), Hyundai (BAIC), Ford (Chang’an), Honda (Guangzhou), Nissan (Dongfeng), and PSA-Peugeot (Dongfeng).  According to the report, this very dense web of subsidiaries and partnerships is going to grow.  Eurofound considers that it will be a key element “to adapt to shifting markets, overcapacity and new technologies.”