Web conference: Progressive Industrial Policy for Jobs and Climate Protection – Just Transition for the Automotive Industry held on 15 July 2021

Manuela Kropp, Rosa-Luxemburg-Stiftung Brussels Office

With contributions from: Ulrike Eifler, DIE LINKE, Spokesperson for BAG Betrieb und Gewerkschaft, the working group on enterprise and trade unions; Benjamin Denis, IndustriALL; Katharina Stierl, Students for Future; Károly György, Hungarian Trade Union Confederation

You can find the English video of the web conference here: www.youtube.com/watch?v=tcJhEXatfqE

The German version is available here:


The latest pandemic-related job losses occurring in the automotive industry and its supply chain around the world have shown that the industry must strive for a sustainable and climate-neutral future. In view of the upcoming COP26 climate summit and the Sustainable Development Goals (SDGs), it is clear that merely announcing the goal of climate neutrality by 2050 does not show a suitable level of commitment when it comes to the climate and will certainly not be enough to guarantee justice and survival for those who are currently the most vulnerable.

Investments need to be made in aligning the transport sector with the goals of the Paris climate agreement, which means investing massively in public and rail transport. To this end, we need a progressive industrial policy able to create alternative jobs and transform parts of the automotive industry. We need a new social contract to foster environmentally friendly jobs and a just transition for workers in the automotive industry. The creation of decent work underpinned by collective agreements and unionisation must stand at the forefront of this transition, alongside further training and retraining.

Ulrike Eifler (DIE LINKE) began her contribution by making it clear that a progressive industrial policy for the transport sector involves much more than simply switching from internal combustion engines to electric vehicles. Instead, a more comprehensive approach is needed to achieve a real mobility transition. However, the 12 million workers active in the European automotive industry must not be left out in the cold. We should avoid deindustrialisation processes similar to those rolled out in the USA, where whole regions were essentially forgotten.

Ulrike pointed out that the trade union power of workers in the German automotive industry sets an example for other sectors and is generally a key source of strength for trade unions and workers. However, the transformation of the automotive industry is not the only challenge that lies ahead. We also need to bring about the necessary energy transition towards renewables and the increasing digitalisation of the world of work (keywords: driverless public transport, the use of robots in the care industry). The ongoing structural upheavals are changing job profiles and undermining workers’ sense of security. Ulrike also warned that this was a dangerous gateway to the greater deregularisation and flexibilisation of employment, which could further erode working standards and cause work to become ever more precarious. Examples of this include the expanding platform economy, the removal of limits on working hours when working from home, and the attacks on working time regulations by the German government during the COVID-19 pandemic, as well as discussions on raising the retirement age. Workers end up bearing the social costs incurred, while the ecological costs are simply passed on to the environment, as demonstrated, for instance, by the fact that in May 2020, the automotive industry demanded that the CO₂ limit values for cars be suspended because of the COVID-19 pandemic.

This is unacceptable, Ulrike explained, because we need a progressive industrial policy that must be worlds apart from the disappointing industrial policy currently pursued in the EU, which only focuses on the construction of battery cell plants and the expansion of charging infrastructure for electric cars and fails to answer key questions, such as where the electricity for electric cars or the raw materials for batteries actually come from. We need to take the entire production chain into account here and promote the recycling of batteries, for example. The switch to smaller, more efficient vehicles must be encouraged, and parts of the automotive industry must be reorganised to be able to manufacture vehicles needed for the mobility transition. Of course, we also need to pursue a ‘policy of short distances’, because every school and hospital closed lengthens the distance people have to travel. In fact, it is important that we expand services of general interest and create decent work for all workers.

The following speaker, Benjamin Denis (IndustriALL), first highlighted the size and importance of the automotive industry. In Europe, around 14 million jobs directly or indirectly rely on this sector. The automotive industry as a whole is also a source of innovation, exports and tax revenues. Like Ulrike Eifler, Benjamin emphasised the strength of the trade unions in this sector. Current challenges facing the industry include decarbonisation, the digitalisation of manufacturing, the fragmentation of the supply chain, and upcoming mergers. In addition, sales slumped during the COVID-19 pandemic, shrinking by about a quarter in 2020. The changes in the industrial landscape are affecting suppliers in particular.

On 14 July 2021, a day before this web conference, the European Commission released its Fit for 55 package of proposals, tightening a number of emission reduction targets for the transport sector and announcing that internal combustion engines would be phased out by 2035. This would present additional challenges, including stricter CO₂ targets, questions concerning new fuels, and the pending increase in energy prices in general. A series of initiatives would aim to secure the value chain: through the Battery Alliance, battery cell production and the production of green hydrogen. There are also blind spots, however: where would the raw materials for batteries be extracted? What roles would hybrid vehicles and sustainable fuels play?

Benjamin also touched on the challenge posed by the social impact of the transformation of the automotive industry. For example, a study conducted by the Boston Consulting Group on behalf of the Electromobility Platform showed that electrification could destroy about one third of jobs on the manufacturing side of the industry. Workers would have to adapt to changing skills profiles and acquire knowledge of engineering, industrial design and ICT. 2.4 million workers would have to be retrained in the EU alone, meaning that a legally binding approach to shaping the transition is all the more vital.

Taking to the floor, Katharina Stierl (Students for Future) highlighted the importance of the mobility transition, as this sector is the third largest emitter of greenhouse gases. Cooperation with the trade unions involved is especially crucial here. The recent floods in Western Europe show that the climate crisis will not leave us unscathed. Public transport offers considerable potential when it comes to cutting emissions, though working conditions in this sector are deteriorating and workers are under ever-increasing strain. The number of passengers has been on the rise in recent years while the number of workers has been falling. 40 percent of public transport workers are over 50 years old, so finding new recruits is a growing problem.

In 2020, Fridays for Future, along with ver.di trade union officials, met with companies to network and support workers in collective bargaining disputes. Public transport workers and Fridays for Future have rolled out joint actions in over 30 cities, allowing them to more firmly entrench the issue of climate protection among workers and raising Fridays for Future’s awareness of workers’ concerns. Katharina pointed out that this approach had already borne fruit, namely in the form of Germany’s first-ever public transport congress. She concluded her contribution by stressing the need to reduce the overall volume of traffic, especially commuter traffic, and to ease mobility needs regarding the latter.

Károly György (Hungarian Trade Union Confederation) began by explaining the relevance of the automotive industry for Central and Eastern Europe, both in terms of the generation of gross domestic product as a whole and for the manufacturing industry and exports in particular. This applies to Hungary as well as the Czech Republic and Slovakia. Károly then shared an old Hungarian joke: if the German automotive industry or economy coughs, Hungarians immediately catch a cold. German-Hungarian relations are closely linked to the interests of the automotive industry and the two countries have forged a stable partnership in this respect. For example, Hungary has paid state aid to support this industry.

Technological upheavals pose considerable challenges for suppliers in Hungary in particular, as they cannot adapt as quickly to the trends for electric and hybrid vehicles. The high number of workers in small and medium-sized companies remains an additional obstacle to trade union work.

State subsidies go to major automotive companies, while small and micro enterprises are left empty-handed. Nevertheless, car manufacturers have earned billions in profits, profits that are essentially subsidised by the Hungarian taxpayer, among others.

With regard to future developments, some questions remain unanswered: what role will hydrogen vehicles play? How and in what quantities will raw materials have to be obtained? While Hungarian workers are certainly grappling with these challenges, they feel as if they are not being heard. Social dialogue needs to be strengthened, including to cope with the challenges posed by the increasing robotisation of manufacturing. To give an example, Bosch has automated its logistics, cutting the workforce by 80 percent.

Of course, this stokes fears within the workforce and demonstrates the importance of worker requalification and retraining. These, however, are rarely made available, although German companies have ‘exported’ the dual education system to Hungary. Strengthening social dialogue is all the more important because the automotive industry is the basis of trade union activities. International cooperation between trade unions is also vital. To conclude, Károly underlined the importance of the European Commission’s draft directive providing 70 percent collective agreement coverage (Minimum Wage Directive) for Central and Eastern Europe in particular.