Renault-Nissan CEO Carlos Ghosn stated his case for government support of the auto industry in very simple terms last week.
Normal financial flows need to be re-established, he said at a reception hosted by the European automakers association, ACEA. Ghosn holds the rotating presidency of the lobbying group.
If we cannot get credit from the banks, we have to get it from governments, he continued.
Welcome to a world where the states role is expanding by the minute. Where the relationship between private enterprise and governments and regulators is being redefined, possibly for a very long time.
Ghosn is very direct. Last week, he warned that the EUs ambitious environmental goals are threatened if the industry doesnt get the financial help it needs.
When we cannot get the money, its very difficult to develop a lot of technology for the future, he said.
The dearth of credit is affecting the car industry in many ways. Its making it difficult and even impossible, to continue to fund existing operations. Its threatening environmental ambitions. And its killing car buyers appetites for new vehicles. After all, 70 percent of all car purchases in Europe are financed.
While Ghosn is appealing to the EU Commission to quickly play a bigger role in rescuing Europes automakers, suppliers have started separate efforts to establish a rescue fund specifically for them. They need the money quickly. Without it, suppliers are at risk of going out of business within months.
At an ACEA gathering last week, the focus was on whether help should come from national governments or from Brussels. France has already acted. Other national governments may follow soon.
Can the EU Commission, which must find common ground between its 27 member nations, move quickly in a situation like this?
At a press briefing, Ghosn didnt answer that question. We have to try, he said. Other ACEA officials were more openly skeptical.
National governments will always be able to act more quickly than the nominal government of a 27-country bloc. But Brussels should -- and likely will -- play a role, if only to make sure that economic nationalism doesnt reverse decades of profitable international growth for many automakers and suppliers.