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THE FUTURE of EMPLOYMENT in the CAR SECTOR Four Country Perspectives from Central and Eastern Europe Contents

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THE FUTURE of EMPLOYMENT in the CAR SECTOR Four Country Perspectives from Central and Eastern Europe Contents ANALYSIS The automotive industry is a key sector in Central and East- LABOUR AND SOCIAL JUSTICE ern Europe. A number of megatrends, i.e. climate change, digitalization and changing mobility concepts are transforming this sector THE FUTURE OF worldwide. EMPLOYMENT IN The employees in Central and Eastern Europe in this sector THE CAR SECTOR are thus facing major changes in their future employment. Four country perspectives from Central and Eastern Europe Against this background, FES Jan Drahokoupil, Ștefan Guga, Monika Martišková, Prague initiated a regional Michal Pícl, Zoltán Pogátsa project on the future of em- June 2019 ployment in the automotive industry in Czechia, Slovakia, Hungary, and Romania. The output are four country stud- ies and a comparative analysis put together in this publica- tion. LABOUR AND SOCIAL JUSTICE THE FUTURE OF EMPLOYMENT IN THE CAR SECTOR Four country perspectives from Central and Eastern Europe Contents Preface 4 1. THE FUTURE OF EMPLOYMENT IN THE AUTO- MOTIVE INDUSTRIES IN CENTRAL AND EAST- ERN EUROPE. KEY CHALLENGES FOR POLICY MAKERS AND WORKERS’ REPRESENTATIVES 5 1.1 Transition towards electromobility in low wage economies: back to the beginning? 6 1.2 Automation and industry 4.0: Undermining the position of factory economies? 7 1.3 Social dialogue and industrial policy in dependent economies: What is to be done? 7 References 9 2. SHORT SUMMARIES 10 SUMMARY of the Czech case study 10 SUMMARY of the Hungarian case study 11 SUMMARY of the Slovakian case study 13 SUMMARY of the Romanian case study 13 3. THE FUTURE OF EMPLOYMENT IN THE AUTO- MOTIVE INDUSTRY IN THE CZECH REPUBLIC 15 3.1 Resumé 15 3.2 The automotive industry in the Czech Republic 16 3.3 Summary and recommendations 29 References 31 1 FRIEDRICH-EBERT-STIFTUNG – THE FUTURE OF EMPLOYMENT IN THE CAR SECTOR 4. ELECTRIC CARS, AUTONOMOUS CARS, AUTO- MATION, DIGITALISATION. THE EXPECTED IM- PACTS OF TECHNOLOGY CHANGE ON THE AU- TOMOTIVE INDUSTRY IN HUNGARY 32 4.1 Main trends in the automotive industry in the coming decades 32 4.2 The structure and the importance of the automotive industry in Hungary 33 4.3 Transition to the new trends 37 4.4 Possible trade unions answers 37 4.5 Conclusions 39 5. THE FUTURE OF WORKERS IN THE AUTOMOTIVE INDUSTRY IN SLOVAKIA 40 5.1 Introduction 40 5.2 Global production networks and the automotive industry 40 5.3 Workers in the Slovak automotive industry 47 5.4 The Slovak automotive sector on the threshold of the fourth industrial revolution 51 5.5 The future of workers in the automotive industry in Slovakia 54 5.6 Recommendations for research 56 5.7 Conclusion 57 References 58 Sources of data 59 2 THE FUTURE OF EMPLOYMENT IN THE CAR SECTOR 6. AUTOMOTIVE INDUSTRY, WHICH WAY? GLOB- AL TRENDS, PERIPHERAL PERSPECTIVES 60 6.1 Introduction 60 6.2 The automotive industry in Romania against the european back- ground 62 6.3 Dependant development of the automotive industry in Romania 70 6.4 Global trends: electric cars, autonomous and connected cars, digitisation 82 6.5 Peripheral perspectives: the impact on the automotive industry in Romania 88 6.6 Conclusions 96 List of figures 98 3 FRIEDRICH-EBERT-STIFTUNG – THE FUTURE OF EMPLOYMENT IN THE CAR SECTOR Preface The automotive industry in Europe is facing a rapid transfor- The studies were presented in separate workshops by the mation. The pressure to change is caused by a number of authors in each country. megatrends: Digitalization and automation, climate change and thus stricter CO2 emissions targets, urbanization and As a conclusion of the project, the results of these four stud- changing concepts of mobility. Additionally, China and the ies were presented in a regional workshop in Prague in May Silicon Valley are entering the international market and in- 2019 and discussed with trade union representatives, re- crease the pressure on European manufacturers to remain searchers and political decision makers from all participating globally successful. Automation trends and the shift away countries. Together with mobility experts from Germany and from the combustion to the electric engine will affect em- the region, potential action strategies to prepare for the fu- ployment and reduce jobs in the long run. ture were explored. Looking at Central and Eastern Europe, many automobile This publication brings the English translation of all four manufacturers relocated parts of their production to the re- country studies together and includes a short comparative gion in the 1990´s due to lower wages and lower labour analysis of all four case studies as well as a summary of the costs. By now, the automotive industries in the Visegrad discussions at the regional workshop. The shift towards countries and Romania have become „integrated peripher- e-mobility will most likely benefit Central and Eastern Euro- ies“ in the global production network. This means that they pean countries in a short- to medium-term perspective be- are mostly dependant on foreign capital and any strategic cause they will keep the production of conventional vehicles decision taken by the parent company elsewhere, will also with combustion engines. The question is, however, what have effects on them. At the same time, the automotive sec- will happen after this transitional period, when the share of tor is of key economic importance and the biggest industrial electric vehicles will increase and the production of cars with employer in many countries of the region. Thus, the question combustion engines will go down as it has to if the European is how will this transformation change employment in the Union is to meet its own emission targets. Developments in sector and what leeway of possible action do local actors this direction would buy the countries in Central and Eastern have to change it? Europe some time, but present a risk in the long run due to decreasing productivity and out-dated technology. Hence, Against the backdrop of these developments, FES Prague de- relevant stakeholders need to prepare for these changes on cided in 2018 to analyse the impacts of this transformation a political and on the company level. The four country studies on employment in the automotive industry from a regional give insights into these developments and recommendations perspective. The consequences comprise not only a loss of what potential action strategies could look like. Hence, they employment but also changes in content and the way of provide the basis for continued discussions about these and working. The project also wanted to explore potential action further questions on a national and the regional level. strategies for relevant stakeholders. In a first step, the study „The future of the automotive industry in Germany. Transfor- Prague, August 2019 mation by design or by disaster?“, elaborated by the Division for Economic and Social Policy of FES in Berlin, was translated from German into Czech and Romanian and discussed among a group of experts in both countries. In a second step, four country studies (CZ, SK, HU, RO) were elaborated to assess the importance of the sector in each national con- ANNE SEYFFERTH text, discuss the effects of the transformation dynamics on CLAUDIA EHING employment and put forward possible recommendations. KATEŘINA SMEJKALOVÁ 4 THE FUTURE OF EMPLOYMENT IN THE CAR SECTOR 1 THE FUTURE OF EMPLOYMENT IN THE AUTOMOTIVE INDUSTRIES IN CENTRAL AND EASTERN EUROPE. Key challenges for policy makers and workers’ representatives JAN DRAHOKOUPIL European Trade Union Institute, Brussels In 2018, FES Prague initiated a regional project on the Romania, 177,156 in Czechia, 97,688 in Hungary and future of employment in the automotive industry in 77,062 in Slovakia.1 Czechia, Slovakia, Hungary, and Romania. The back- ground of this project is the transformation of the The European automotive industry recovered well from the automotive industry driven by a number of mega- crisis of 2008. CEECs, in particular, have seen a rapid growth trends such as climate change and digitalization. The of output after 2012, contributing to full capacity utilization output of this project are four country studies that in the region. This was accompanied by labour shortages in describe the significance of the automotive industry the sector, contributing to significant wage increases. At the for each national context, assess the impact of the same time, however, the automotive industry faces a perfect transformation dynamics on employment and elabo- storm of fundamental challenges. First, reacting to the regu- rate potential strategies for action. The results of the latory efforts to curb the climate change, the industry has studies were discussed in a regional workshop in embarked on a shift from producing cars power by the com- Prague in May 2019 by Jan Drahokoupil and the au- bustion engine towards an increasing reliance on electric ve- thors of the country studies together with trade un- hicles (EVs). Such vehicles are much less complex and thus ion representatives and political decision makers. require much lower labour input. What is more, the success of European car makers in managing the electrification of This note highlights some of the key insights from drive train is far from guaranteed. There are key infrastruc- the studies and the discussions at the regional work- ture challenges to overcome. The European car makers are shop. It identifies key challenges for policy makers also dependent on Chinese and Korean suppliers of cells and and workers’ representatives. These include the batteries, the key components that constitute a bulk of the management of job displacements, formulation of an value of an EV. industrial strategy, investment into life-long learn- ing, and tackling the challenges also through social Second, the leading position of European car makers is chal- dialogue and collective bargaining on the company lenged also by digitalization, including the development of level.
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