Together we are strong! Towards a Coordinated Action for the Social-Ecological Trasformation of the European Automotive Industry

Starting in the late 1970s, we witnessed the spread of neoliberalism, building on market liberalisation and privatisation. The dismantling of tariff and non-tariff barriers to international trade and the opening of countries to foreign investment, technological progress in the fields of information and communications technology (ICT), and decreasing costs of coordination and transport completely changed the organisation of production. As a consequence, large companies in the Global North could outsource and offshore a significant share of their economic activities. So-called global value chains (GVCs)1 emerged, multiplying the trade of intermediates and semi-finished goods across borders (Barrientos et al. 2016: 1214). In fact, this geographic dispersion of globally integrated production steps represents the distinctive feature of the latest wave of globalisation in comparison to earlier waves, which displayed – from a trade perspective – an increased exchange of finished goods on the world scale. The deepened trade integration through cross-border production chains has also changed the power relations among companies and between capital and workers. On the one hand, we witnessed what Bennett Harrison (1994) termed “concentration without centralisation”. This major structural transformation of capitalism is characterised by the emergence of big transnational companies (TNCs), which have become lead firms in global value chains and control the core functions related to the chain, while other economic activities – mostly associated with production – are decentralised through different types of outsourcing. The subcontractors are often based in low-wage regions, for example, in the case of the European Union (EU) in Eastern Europe or in emerging economies of the Global South (for a detailed explanation see below). The suppliers of lead firms are often small and medium-sized enterprises (SMEs), which are sometimes directly affiliated to the lead firm, and sometimes formally independent but reliant on its orders. Thus, ultimate control of the means of production has become more concentrated, but production processes have not become geographically more centralised.

The fragmentation of production has posed certain challenges for the trade union movement. The constant threat of relocation of economic activities to countries with lower labour costs as well as less rigid social and environmental standards has increased competition among groups of workers (inside the EU and beyond) and has aggravated environmental problems. Furthermore, the core-periphery division in Europe has intensified together with the reorganisation of production, with foreign direct investment (FDI) in manufacturing playing a crucial role in this (Weissenbacher 2019: 253–260). More recently, digitalisation and the climate crisis have posed further challenges to those industries characterised by global value chains such as the automotive industry (Galgóczi 2019b; Drahokoupil 2020b; Kropp 2020). In this context, the European Commission (EC) (2019b) highlights the “twin challenge” of the digital and ecological transformation. Finally, in 2020, the prospects for production, exports and sales of industrial goods deteriorated further as a result of the COVID-19 pandemic. In the EU, the automotive industry accounts for several million jobs (ACEA 2020a; EC 2020b), including in other sectors acting as suppliers to car manufacturers. The digitalisation of production (Industry 4.0) and products (e.g. autonomous driving), as well as the decarbonisation of the transport sector (through the promotion of e-mobility, for example), will significantly affect the existing global automotive value chains governed by European companies. Furthermore, the economic effects of the COVID-19 pandemic have hit the industry hard. According to a press release of the European Automobile Manufacturers’ Association (ACEA) (2020b) from November 2020, passenger car registrations declined by 26.8% in the first ten months of 2020. All these factors do not only pose challenges to the headquarters of the companies concerned but also to trade unions and workers. This brochure begins by explaining what led to the transnationalisation of production chains and identifying – based on the study Evolution of International Production Chains: Towards a Coordinated Action of European Working Class Organisations by Gaddi and Garbellini (2020) – the most relevant industrial sectors in the EU in terms of value added and employment. Due to the centrality of the automotive industry, the brochure then focuses on the challenges associated with the ongoing transformations in this sector. First, it outlines how European working-class organisations have responded to these challenges, before presenting additional proposals regarding what could be done.

The full brochure is available here: Together we are strong! (Rosa-Luxemburg-Stiftung Büro Brüssel) (


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