Automotive industry signs joint business code of conduct to support restart of production CLEPA and ACEA

What is the objective of the business code of conduct in response to COVID-19?

The objective of the code is to successfully navigate the coronavirus crisis. For this, timely exchange of critical and appropriate information is necessary, ensuring that all stakeholders in the value chain can plan and act as effectively as possible.

"While the safety and well-being of our communities remain the top priority, a timely and well-coordinated restart of the sector is of utmost importance to mitigate the impact of the COVID-19 crisis on society. The joint automotive industry code of conduct will make a significant difference in this process," noted Sigrid de Vries, Secretary-General of CLEPA.

What areas does the business code of conduct address in response to COVID-19?

The Code of Conduct includes chapters on health and safety in the workplace, timely communication, contractual requirements, and coordination of activity resumption.

Safety in the workplace

The health and safety of citizens and employees is a priority. Therefore, all actors in the value chain must commit to:

• Prioritize the health and safety of citizens and employees by providing a safe working environment according to applicable safety standards.
• Request harmonized measures from public authorities throughout the EU, where possible.
• Discuss, along with social partners, common criteria, standards, and conditions for the safe return of employees to work to restart production.
• Ensure excellent communication with employees, implement measures for preventive health care, and provide necessary training.
• Share best practices in health and safety with partners across the value chain.

Transparency

Successfully exiting the crisis will require the timely sharing of critical and appropriate information, enabling value chain partners to plan and act as effectively as possible. Before and after the process therefore, value chain partners are committed to:

• Share transparent and credible information about the forecasted demand with partners in a timely manner, informing each other about delays and subsequent deviations.
• Share information about closures, downtime, and increased capacities to avoid unnecessary financial loss.
• Communicate clearly and transparently with business partners about actual capacities in production plants, considering safety measures.
• Engage in good faith discussions with business partners if the exceptional situation requires setting new priorities in ongoing projects, considering limited capacities in R+D and plants. This may involve reviewing and/or postponing project milestones and planning.

Contractual requirements

All value chain actors have a shared responsibility for the continued prosperity of the sector. Therefore, value chain actors believe that:

• Respect contractual agreements, especially regarding payments, timely receipt and delivery of ordered products, investments, tools, tests, development and engineering services, and inventories.
• Apply these terms pragmatically, considering the extraordinary circumstances affecting the entire industry, to avoid unnecessary operation or additional costs to value chain partners.

Preparing for recovery

An orderly restart of production along the entire automotive value chain is impossible without close coordination. Therefore, all actors in the value chain are committed to:

• Commit to a timely start-up of production capacities, coordinated among all previous and subsequent partners in a challenging and continuous economic and health environment.
• Consider the effects of production closures in one region and the availability of components for the continuation of production in other parts of the world.

Fair competition

Despite the recognised need for broad industry cooperation, all actors in the value chain are fully committed to compliance with applicable competition laws. In addition to regular legal review of all coordination and information exchange efforts, the following principles will apply:

• Limit commercially sensitive information, including demand, production capacity, or downtime or capacity increases, to partners in the same value chain, generally not sharing with competing value chains.
• When considering the exchange of information or temporary cooperation between competitors necessary to prevent supply shortages caused by COVID-19, structure such exchange or cooperation in accordance with Article 101 TFEU/53 of the EEA Agreement or other applicable competition laws and in line with the guidance of competent competition authorities.

"Our commitment is to emerge from the crisis even stronger, and everyone involved in the value chain has a shared responsibility in managing the relaunch of the industry in a sustainable manner. The Business Code of Conduct provides manufacturers and suppliers with essential guidance on the necessary approach to overcome the COVID-19 crisis," emphasized Eric Mark Huitema, Director General of ACEA.

As stipulated in the Code, COVID-19 represents a global health, social, and economic challenge with a potentially severe impact on people, businesses, and countries. Minimizing risks for employees and the community must always have the highest priority. Joint efforts against the COVID-19 crisis, with a collaborative spirit and compliance with applicable competition laws, will lead to the best possible outcomes to protect people and minimize economic damage.