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Covid 19 pandemic: Code of conduct in the automotive industry | VDA

In order to support the restart of production in the context of the Covid 19 pandemic while taking health protection into account, the European associations of car manufacturers (ACEA) and suppliers (CLEPA) have agreed on a joint code of conduct. The German Association of the Automotive Industry (VDA) has made an unofficial German translation available. The original English text applies. We would like to make this information available to our customers and partners in the automotive industry.

Foreword

Activity in the automotive industry has come to an abrupt and almost complete halt after a ten-year period of growth and innovation that followed the severe financial crisis of 2008 / 2009. This is an unprecedented situation with great potential for damage to an otherwise thriving, innovative and competitive industry.

Driven by the desire of all stakeholders along the value chain to overcome this situation, coupled with ethical corporate governance and based on the experience gained in 2008 and 2009, the automotive industry is determined to emerge stronger from this crisis. The experiences and insights summarised in this Code of Conduct against the backdrop of the Corona crisis are intended as guidelines for basic orientation necessary for overcoming the Corona crisis in a timely and coordinated manner.

General

The Corona crisis poses health, societal and economic challenges for the entire world, with a potentially serious impact on people, companies and countries. The top priority at all times should be to minimise the risks to workforces and society.

We will achieve the best possible results in protecting people and minimising economic damage if we steer through this crisis together in a spirit of partnership that takes into account the valid competition rules as well as the anti-trust requirements.

  • In order to make the decisions that will ensure a successful return to a future-proof and sustainable value chain, there needs to be a vision of the post-crisis recovery phase. This includes open-mindedness and openness to a collaborative approach to enable quick and effective decisions to be made and, where necessary, adapted in a spirit of solidarity.

Job security

The health and safety of citizens and employees enjoy high priority. All participants in the value chain are therefore committed,

  • Provide a safe working environment that complies with applicable safety standards.
  • call on public authorities to harmonise measures across the EU wherever possible.
  • discuss, in consultation with social partners, common criteria, standards and conditions under which workers can safely resume production.
  • communicate closely with employees, establish preventive health protection measures and provide the necessary training for this purpose.
  • share best practice on the most appropriate health and safety measures with all participants along the value chain.

Transparency

Successfully overcoming the crisis requires a timely exchange of relevant and appropriate information that enables the value chain participants to plan and act as effectively as possible. The upstream and downstream partners in the value chain are therefore committed to,

  • provide each other with transparent and reliable information about the expected demand and inform each other promptly about delays and the resulting deviations.
  • inform upstream and downstream partners of plant shutdowns, production outages and capacity restarts so as not to incur avoidable costs.
  • Maintain clarity and transparency in communication with their business partners about the production capacities available in their plants in compliance with safety measures.
  • discuss in good faith with its business partners whether the exceptional situation for ongoing projects requires reprioritisation in terms of limited capacity in research and development and machinery and equipment, which may include adjusting or postponing project milestones and planning.

Contractual obligations

All partners along the value chain share responsibility for the continued economic success of the industry. In times of crisis, maintaining liquidity is particularly important. Therefore, the participants along the value chain make the following assumptions:

  • The industry can only emerge from this crisis in a sustainable manner if all parties respect the contractual obligations entered into, especially with regard to payments to be made, the acceptance and timely provision of ordered products, capital goods, production facilities, testing, development and technical services, as well as inventories created by orders, and that
  • taking into account the exceptional circumstances affecting the industry as a whole, these contractual obligations (including force majeure clauses) are applied in a pragmatic manner and with the aim of not imposing avoidable or additional costs on value chain partners, with the aim of maintaining a holistically healthy value chain.

Preparing for economic recovery

An orderly resumption of production along the entire value chain of the automotive industry is not possible without close coordination. All actors in the value chain are therefore committed,

  • to ramp up production capacity again in time and coordinate this with all upstream and downstream partners in what continues to be a difficult economic and hygienic environment. This applies to projects, production facilities as well as logistical capacity and, where applicable, the consideration of possible critical stakeholder requirements.
  • take into account the impact of production interruptions in a particular region on the availability of needed components for continued production in other parts of the world.

Fair competition

While the need for extensive cooperation in the industry is indisputable, all participants in the value chain nevertheless undertake to comply fully with the applicable legal provisions of competition law. Beyond a regular legal review of all efforts to coordinate and exchange information, the following basic rules shall apply:

  • Competitively sensitive information, including on the demand situation, production capacities, planned downtime or capacity expansions, shall be limited to partners in the same value chain and shall in principle not be made available to competitors in other value chains.
  • In cases where a temporary exchange of information or cooperation between competitors appears necessary to avoid a supply shortage as a result of the Corona crisis, such exchange or cooperation shall take place in accordance with Article 101AEUV/53 EEA or otherwise applicable competition rules and in accordance with the guidelines of the relevant competition authorities.

About ACEA
ACEA represents the 16 largest European manufacturers of cars, vans, trucks and buses: BMW Group, CNH Industrial, DAF Trucks, Daimler, Ferrari, Fiat Chrysler Automobiles, Ford of Europe, Honda Motor Europe, Hyundai Motor Europe, Jaguar Land Rover, PSA Group, Renault Group, Toyota Motor Europe, Volkswagen Group, Volvo Cars, and Volvo Group.

About CLEPA
CLEPA represents over 3,000 companies providing state-of-the-art components and innovative technologies for safe, smart and sustainable mobility, investing over €25 billion annually in research and development. Suppliers to the European automotive industry employ a total of almost 5 million people across the continent.

Source
German Association of the Automotive Industry (VDA): https://www.vda.de/de

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