Ford of Europe boss 'hugely disappointed' by EU's views on future transport policy
 | Ford's Odell says overcapacity is a problem in Europe. |
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COLOGNE, Germany -- Ford of Europe CEO Stephen Odell says the EU's white paper on future transport is a "hugely disappointing document".
Speaking at the Automotive News Europe congress here in Cologne, Odell said the European Commission's recently published white paper on future transport policy, that calls for a 50 percent reduction in internal combustion-engined cars in urban areas by 2030, and a complete ban by 2050, does not effectively address the issues of congestion and environmental improvement in urban areas.
Odell said the EU had a critical role to play in developing transport strategy and in setting future policy frameworks, but wanted proposals which covered any collateral damage to the region's automakers that they could cause.
The current proposals, which include a general shift from road to rail and shipping by 2025, Odell says is "unrealistic and one-sided". "Such radical proposals require further discussion and reflection, and they need to respect the principles of technical neutrality and freedom of consumer choice," he said.
He added the EU proposals could discourage essential research and development projects in Europe, and significantly reduce employment in the region.
"We have to consider transport policy not only as part of a wider industrial policy, but also in its effects on energy policy," he said.
EU free-trade agreement with South Korea
Odell also criticized the EU's free-trade agreement with South Korea, calling it ''damaging'' for Europe's auto industry.
He said that eliminating auto tariffs into the EU for exporting nations, with little or no export potential for the EU in return, would seriously undermine auto manufacturing in Europe.
''The EU-South Korea free-trade Agreement signed last October, for example is damaging for the EU automotive industry. It gives improved market access for Korean manufacturers in Europe, while export opportunities for European-based manufacturers are likely to remain strictly limited in South Korea,'' Odell said.
He added: "In fact, we're already hearing some disconcerting rumors from Korea concerning the strengthening rather than the weakening on non-tariff trade barriers''.
South Korean lawmakers passed the free-trade agreement with the EU in May, clearing the last hurdle for the world's second-biggest trade deal to come into effect in July. The deal is eclipsed only by the 1994 North American Free Trade Agreement between the U.S., Canada and Mexico.
Ford is among automakers, including Fiat S.p.A. and PSA/Peugeot-Citroen SA that fear the agreement could flood Europe with cheap Korean-built cars.
Overcapacity in Europe
Odell also said that European carmakers needed improved efficiencies and more competitive business practices to ensure that the industry could compete on a global level and ''play to its strengths."
"Overcapacity was a major problem before 2008, and has only been exacerbated since the onset of recession. Some figures suggest we have as much as 35 per cent overcapacity in the European industry today,'' he said.
He added that Europe could play a strong role in future global car manufacturing if there was an effective EU policy framework to support the auto industry.
Odell pointed out that the auto industry remains an area of strong growth potential. "Let us all remember that the auto industry is one of the world's great growth industries. It's estimated the annual global vehicle market will be around 95 to 100 million units a year by mid-decade, and about 112 million vehicles by 2020. That's 112 million vehicles by 2020 that have to be designed, engineered and built somewhere in the world – So why not here in Europe?'' he added.
David Jolley contributed to this report
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You can reach Luca Ciferri at lciferri@crain.com.
