ILO research roundtable on the automotive industry

The roundtable on the crisis in the automotive industry presented an opportunity to take stock of the situation in an industry that has been caught in the maelstrom of the current world economic crisis. The meeting was held at the ILO headquarters in Geneva and focused on current government programmes, labour–management relations and how these will be changed through the current crisis. Over 20 experts on the automotive industry from universities, international organizations, policy think tanks, employers’ and workers’ experts, the IOE and the ITUC took part in the discussions.

The crisis has impacted automotive manufacturers and components producers around the world, however, its severity varies across countries, companies and workers. The current responses to the financial crisis provide liquidity to the industry, but largely overlook its deeper structural problems.

The roundtable also highlighted that, firstly, the prevailing business model was linked to the broader global phenomenon of corporate financialisation, as a result of which the auto industry still has not responded fully to the challenges of climate change and dependence upon oil. Second, overcompetition and price wars between auto manufacturers led to cost cutting strategies that also affected their relationships with workers and components producers. Third, in cases where the business model of short-term profits and cost-shifting has overshadowed solid financial, technological and labour practices, this has generated vulnerabilities for companies and workers and also created frictions between the key players who instead should be partners in facing the crisis.

The crisis also provides an opportunity; for example, the demand projections for the next decade point toward significantly higher global demand for vehicles. This new growth will shift the geography of the industry.