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European car makers pushing ČR, EU

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In their new role as temporary EU leaders, the Czechs have promised to present within a few weeks a plan to help car manufacturers. And another Czech is lobbying for the most generous plans possible for the European automotive industry.

The great-grandson of historian Jaroslav Goll, grandson of economist František Hodáč, nephew of actress Nataša Gollová, and for many years one of the most influential lobbyists in Brussels, Ivan Hodač is the Secretary General of the European Automobile Manufacturers’ Association (ACEA). A man whom the current government once even considered for the post of the Czech ambassador to the European Union, despite his Danish citizenship. Car manufacturers would hardly find a person with better contacts with the Czech presidency.

“The crisis has hit the automotive industry with an extraordinary strength and the sector really needs help. Politicians cannot afford to ignore it because there are too many people connected with it. And it’s necessary to take a prompt action, otherwise the impacts can be fatal,” Ivan Hodač said.  

Kalousek’s way is wrong

Hodač says that connected to every job in a car plant is twelve jobs in related sectors, a situation unseen in any other branch of industry. “We can cut car prices heavily, but that single measure wouldn’t revive demand: in times of uncertainty, buying a car is logically the first thing that people can postpone,” he added.  

For the time being, Czechs have been unwilling to disclose what tools they want to propose to help car manufacturers. The country will present its plans in early March at the meeting of European trade ministers, but the signals released so far are very contradictory. On the one hand, Prime Minister Mirek Topolánek says he would like to introduce a European-wide scrap fee as soon as possible – a one-off subsidy for liquidation of old cars. On the other hand, Finance Minister Miroslav Kalousek describes such a solution as unsystemic and as a wish of car industry lobbyists that he has to oppose both as “politician and citizen”. 

“I esteem Mr. Kalousek, but he is dangerously wrong in this. And given how much the Czech economy depends on the automotive sector, I think he will revise his opinions soon,” said Hodač.  

Car producers are now trying to achieve that governments get European Investment Bank or European funds subsidies for the scrap fees, so that as many countries as possible are motivated to introduce contributions for new cars, he said.  

Frozen money

At the same time, however, he warned that even if the whole of Europe introduced scrap fees, it would not be enough and the car industry will ask for more. “It would of course be significant help, but it would not be sufficient by any means,” he said.  

Car makers are therefore lobbying for as easy access to European Investment Bank loans as possible, but also for the possibility to get financial resources for example from a globalisation fund that helps ease the social impacts of globalization and production transfers to cheaper territories. 

Hodač said the fact that people and businesses do not have access to money to finance car purchases is still the main problem that car makers are experiencing now.

“Governments have provided huge financial injections to banks, but the money stays in the banks and doesn’t get to others. Businesses and people who want to buy cars don’t have access to loans,” Hodač said.  

But he himself admitted that the Czech presidency or the European Commission can hardly do something about that. Because the entire world has been trying to achieve this goal since last autumn without any success.

Translated with permission by the Prague Daily Monitor.

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