The difficulties facing the automotive industry have started to pile up, as witnessed by the number of bankruptcies or the frequent announcements of recovery plans featuring radical measures like plant closures or mass redundancies. The past few months have been marked in particular by Rover’s bankruptcy in Europe, and by Delphi’s plig and the painful decisions that GM have taken in North America.

Other carmakers are likely to announce in 2006 socially costly savings (site closures, job cuts, loss of advantages), be it Ford in the US, and the Mercedes group (including Smart) or Renault in Europe.

Many of these problems were foreseeable, whether the rising cost of pension funding in the US or the entry of new competitors into some very profitable niches (large pick-ups for US carmakers, minivan for Renault). It remains that not all firms have been affected to the same degree.

Clearly, the business climate has a major impact on automobile firms’ profitability, leading to a modicum of convergence within some regions where several companies are all facing problems at the same time. Significant variations do subsist, however, between the trajectories followed within any one environment, precluding any incrimination of institutional factors (such as work flexibility issues). Rather, it is in the interlinkage between firms strategies’ and their institutional environment that the configurations’ diversity should be explored.

Over the course of this new year, GERPISA members will be working hard on this interlinkage. In the mean time, our best wishes for a happy 2006 to each and every one of you.