Press Releases

Wissmann: Suppliers are a critical core part of the German automotive industry’s drive for innovation

Berlin/Leipzig, 18 June 2015

IG Metall suppliers’ conference “Value creation undergoing transformation” in Leipzig

“The automotive markets, which are growing around the world, can no longer be served solely by domestic production. Our member companies – manufacturers and suppliers alike – have been well placed internationally for many years and are consistently pursuing this strategic course. The internationalization at automotive suppliers in particular secures jobs in Germany, too. However, the increasing activities of our companies abroad lead to new competition between sites in innovations and investments. That is a new challenge for Germany, which we have to overcome by pulling together as companies, trade unions and policy-makers,” stressed Matthias Wissmann, President of the German Association of the Automotive Industry (VDA). He was addressing the plenary session of the suppliers’ conference entitled “Value creation undergoing transformation” organized by the IG Metall trade union in Leipzig. The two-day event was opened by Detlef Wetzel, President of IG Metall, and Michael Guggemos, Management Spokesman of the Hans Böckler Foundation, and offers a comprehensive forum for an intensive exchange of information and opinions between works council members from vehicle manufacturers and supply firms.

“The suppliers’ importance to our automotive industry cannot be overestimated. Far in excess of 500 of our more than 600 members form the largest manufacturer group within the VDA in terms of numbers. We are delighted that IG Metall and the Hans Böckler Foundation are dedicating this year’s congress to the supply industry,” Wissmann underscored. “These family firms will be the first to indicate whether we can continue to safeguard the German businesses and their high levels of employment in the next decade. Thankfully IG Metall has clearly recognized this challenge. In the crisis years of 2008, 2009 and 2010, he said, the automotive industry and IG Metall had both strongly supported the short-time workers’ regulation, which had proved to be an indispensable bridging measure for the regular workforces. “In the individual facilities, innovative and varied flexibility options were created to protect jobs. The success of the German labor market is closely tied to the collective bargaining partnership,” the VDA president said, and explained that the current collective agreement showed the partners would not be able to sit back and relax over the coming years. Wissmann told the conference that at this year’s International Motor Show (IAA) in Frankfurt am Main this September, IG Metall and the VDA would once again be holding a joint symposium on the major challenges facing Germany as an automotive location.

An important topic at the suppliers’ conference is the relationship between the manufacturers and the suppliers. “Consumers focus on the manufacturers and their products – the vehicles – but the suppliers represent a critical core part of the drive for innovation in the German automotive industry. The VDA is an intermediary between the partners and offers a platform for sharing views and for frank exchange of ideas, which is sometimes necessary. The community makes the German automotive industry strong. This cooperation – fostered by the common VDA umbrella – is also internationally regarded as exceptionally successful. This innovation partnership will be even more decisive in the future: more than 75 percent of value-added is generated by suppliers,” Wissmann stressed.

“Internationalization is absolutely essential for the major players in the supply industry, and increasingly also for the small and medium-sized tier 2 and tier 3 suppliers. At some suppliers it’s a case of ‘if I don’t get the customer’s order in China or Mexico, I soon won’t get it in Germany either.’ On the path to greater internationalization, the VDA does everything it can to support its suppliers. IG Metall has accompanied us constructively on this path of internationalization. The companies’ presence in the growth regions makes them more competitive and secures important market shares. If German vehicle manufacturers had to look for too many new partners in other countries, because domestic suppliers were not present in these locations, they would also cooperate with these new partners in Germany more than they do today. We must make every effort to ensure that in the future this will continue to benefit German industry,” Wissmann said. The competitiveness of German plants was neither a static, long-term state nor something that would just continue to function automatically. Instead, he explained, we have to work for it every day. And therefore politicians have to re-align the overall conditions to improve Germany’s competitiveness. In the future, Wissmann said, he would like to see more joint appeals from the automotive industry and IG Metall.

Wissmann drew attention to the huge opportunities offered by the planned free trade agreement between the US and the EU (TTIP), in particular for small and medium-sized firms: “I know that IG Metall is skeptical about the investment protection in TTIP. But especially for small and medium-sized supply companies it is essential to their survival that their investments can be planned and are protected from discrimination and arbitrary actions. Let the industrial SMEs have the courts of arbitration,” Wissmann appealed. “Investment protection is a fundamental component in our industry’s success strategy, a combination of exports from Germany and local production.” He added that the VDA and the European Commission were working to promote clear improvements to the arbitration system. However, there was not much time left for setting important worldwide yardsticks with the TTIP.

At the suppliers’ conference VDA Managing Director Dr. Ulrich Eichhorn pointed up new megatrends that will influence the future of mobility, in his statement in the panel discussion “Shaping the future – New products for new business models.” He said, “This is about the political, economic and social challenge of making the traffic of the future safe and efficient. The German vehicle makers and their suppliers are developing solutions for the most varied driver assistance systems – and many of them are already in use. The systems help in carrying out the tasks involved in driving and relieve some of the burdens on drivers. The objective is to create sustainable technological innovations for modern, efficient mobility solutions in all vehicle segments. The suppliers – large corporations, but also SMEs – should take advantage of the opportunities offered by the new technologies and check how they can continue developing their business models.

Eckehart Rotter
Eckehart Rotter Head of Department Press

Tel: +49 30 897842-120 Fax: +49 30 897842-603
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