Fit for the scrapheap?

The impending shutdown of the Opel plant in Antwerp, Belgium, is a sign of the times in the ailing European auto sector. The press gazes beyond the current recession to mull the future of one of the continent’s core industries.

Published on 22 January 2010 at 16:36
Citroën C-Métisse prototype at the World Car Fair, Paris 2006. Image : Jipol /Flickr

"Sacrifice of Opel Antwerp puts paid to the Flemish miracle”, “Opel: a bolt from the blue", "Opel jettisons 2,600 people": across the board, the Belgian press leads with the shutdown of the Opel plant in Antwerp, which General Motors announced on 21 January. "In a globalised world ruled by multinationals, a little region like Flanders without any real political stakes is the perfect place to let the axe fall,” bewails De Morgen. But Antwerp won’t be alone. GM, after having repeatedly denied any plans to close factories, now intends to shed 8,300 (4,000 in Germany alone) of its 50,000 employees in Europe and cut capacity by 20%.

"The big question", according to De Standaard, is: “What are we doing to provide for our future, which will no longer be based on the assembly of conventional cars? We’ve got to face the facts: this sector’s halcyon days are gone for good.” The paper urges the government to take its responsibilities seriously and says carmakers absolutely must bank on innovation to get out of the crisis. "There are opportunities in cutting-edge technology and ecological products – for electric cars, among other things [...]. The state has a key part to play in this radical upheaval: it should create favourable conditions to promote innovation and attract investors." Does the impending closure of the Opel plant portend the demise of the European automotive industry? The layoffs in other countries as well would seem to suggest just that, fears Les Echos: Renault and Peugeot-Citröen have announced 10,000 redundancies for 2010, and Fiat is planning to shut down its plant in Sicily, which employs 1400 people. And "the combination of the recession, market maturity, and the technological progress and inevitable advent of new competitors from Asia bodes ill for European autos”.

One in five cars made in Eastern Europe

And yet, argues the Parisian financial daily, “Europe has perhaps never been as competitive as it is today.[…] Volkswagen is outperforming its biggest rivals, first and foremost Toyota; Renault remains the pioneer and paragon of successful transcontinental alliances; Fiat is taking over Chrysler; and Audi, Mercedes and BMW are still basically unrivalled anywhere on the planet." So the threat facing European carmakers isn’t so much that of the end of an industry, “but of its mode of production”, points out Les Echos. The German, French and Italian industries have been “hoisted by their own petard” in pursuing a strategy, in view of the recession and market maturity, of delocalising auto assembly to Eastern Europe. "Nowadays one in five cars is made in Poland, Hungary, Romania or Slovenia. The modern units are more profitable than the ailing old plants. The upshot is overcapacities that are hard to estimate but, given the collapse of the market, could well hit and even exceed 50%," warns the paper. "It is this transition that is going to be painful and has already ravaged sectors like the steel industry. And we already know where the story goes from there: concentration of competition, modernisation of production and specialisation in upmarket products."

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"Belgium could serve as an example for the German government, which had claimed it could ensure Opel’s survival,” muses Der Tagesspiegel in Berlin. “Even though the Flemish government was prepared to shore up Opel to the tune of €500m, General Motors just wiped its Antwerp operations off the map. Sometimes money isn’t everything.” This episode illustrates the inability of governments to save big domestic companies, La Libre Belgique remarks. In fact it “reflects a twofold incapacity. In the first place, that of politicians to keep influencing the course of events in a globalised economy.[...] Secondly, that of Europe to transcend national self-interest and come up with a concerted and socially coherent response – one that serves the general welfare – to corporate diktats and blackmail.”

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