Head of European suppliers group outlines plan to confront coronavirus crisis

Thorsten Muschal, executive vice president sales and program management at Faurecia, was elected to lead the European suppliers association CLEPA in January. He was immediately tested by the auto industry's biggest challenge in recent memory, the coronavirus pandemic. He spoke with Automotive News Europe News Editor Peter Sigal about how CLEPA members, which have expressed growing worries in recent surveys, can weather the crisis, and what the group’s future priorities are.

What are you doing to help your members, large and small, survive right now?
What we are experiencing right now shows that a European voice and aligned behavior joined in a shared policy approach is more needed than ever. The big members, the Bosches, the ZFs, the Continentals — they all have put task forces in place to manage social systems and protect their people in different countries. They are looking for coordinated political and financing support. For smaller companies it’s more a question of survival.

How can the supply chain keep itself afloat, with factories shut and orders in limbo?
It’s key to make sure that everybody pays to keep the supply chain up and running so the smaller companies don’t fall into bankruptcy. The first thing we say is that nobody should take advantage of this situation. We have seen in a crisis that not everything is rational. We need to push this discipline. It’s a question of ethics.

What lessons could be learned?
In every crisis there is always an “after.” But this one is different. We have a lot to learn. We are all learning the lesson that globalization is a challenging topic, and we see how difficult it is to keep our supply chain working. We also need to think about how we start up again. The megatrends [such as electrification, autonomy and connectivity] will be back and we should not completely neglect our whole agenda.

Outside of the coronavirus pandemic, what is the most pressing issue for CLEPA and its members?
Let me start by looking at the extremely big picture. The auto industry is under a lot of pressure, and it's facing its biggest transformation ever. It started several years ago with Dieselgate [Volkswagen Group’s diesel-emissions cheating scandal], and now we have digitalization, carbon neutrality and autonomous vehicles. We need to build Europe into an automotive industry powerhouse. To do that, to build on our strengths, we need to make Europe an attractive marketplace. So, we have to raise our voice and have an influence on politicians.

How do you improve Europe’s competitiveness?
It's always a big bet when you invest in a new technology. Suppliers have to make decisions. Should you localize an R&D center in Spain, Portugal, Germany or France? Where can you find the right conditions and the right political framework? Europe is perfectly positioned globally. On the one side there's the market in China, on the other is the U.S. market. If Europe shows up at the right time with the right, attractive market conditions, we can build on our leading position. We have a very strong, diverse supply industry that covers a lot of areas.

What sets Europe’s supply base apart?
Innovation is a key differentiator for Europe. We have all the ingredients. We have strong European customers, which are leading automakers, and we have the strongest supply base in the world. This is a position we need to defend and make even stronger. But we are undergoing a huge transformation.

The auto industry did not get what it wanted in the last round of EU emissions targets. How will you approach legislators in Brussels to make your voice heard?
We need to be realistic. The crisis and scandals that started four or five years ago were created by the auto industry. We have hurt our reputation. That's a fact, whether you like it or not. A lot of policymakers are very critical of this. What we need to do is demonstrate the things we are doing to work toward decarbonization, to make cars safer and more customer friendly. There is a lot of work in front of us, especially with a new European Council. We need to provide the different commissions and with studies and facts, and then have an intensive exchange of views. It's not only about the cars and the emissions they product. It’s also about the infrastructure and business models.

Can you convince legislators to look beyond tailpipe emissions to the whole CO2 picture?
Tailpipe emissions are certainly critical, and our supply base and automakers are working to improve them. However, we need to tackle emissions in a broader sense, including vehicle life cycle, the grid and infrastructure, and charging stations. We also need to gain end-consumer acceptance. People have questions that need answers: What kind of powertrain should I buy? What is the resale value of my car going to be? Where can I charge my car?

We are still awaiting EU certification for higher levels of autonomous vehicles, including so-called Level 3. Is that a problem for suppliers and automakers?
We see an ongoing trend for stronger and improved assistance systems, but the fully autonomous car remains a long-term vision. There are questions of legislation, liability, mixed traffic between autonomous and traditional cars, and also consumer behavior. Regarding legislation, it reinforces what we expect from policymakers: strong support for the industry to bring ideas into reality, with the proper legislation.