Suspicion over Polish plans for carmakers

Date: 19/06/1997

By Mark Turner

THE ever-contentious Polish automotive industry is yet again proving to be a source of friction between the EU and the largest central European applicant for Union membership.

Only weeks after the two sides settled a long-running dispute over Poland's preferential treatment of Korean manufacturer Daewoo, Warsaw is planning a new production and assembly licensing system which is being viewed with deep suspicion by the European Commission.

Under the plan, car manufacturers would, in future, face minimum investment thresholds and minimum employment conditions, which Commission analysts fear could impose dangerous restrictions on western European investors and threaten the country's Europe Agreement.

Under the rules, for example, firms may be required to employ a minimum of 500 or 1,000 workers in an assembly plant, which may not be feasible for companies planning a small-scale efficient operation.

In advance of drafting the law, Warsaw presented its “ideas and principles” to Commission administrators in order to avoid “any misunderstandings and grounds for conflict”, according to a spokesman for the Polish mission to the EU.

The Commission quickly relayed its general concerns, after which the Poles produced a more specific second draft for inspection. This received an extremely detailed response from the institution, laying down exactly where it felt the proposals were going astray.

Warsaw diplomats say that a third draft is now on the way which may go some way to allaying Union criticisms.

While the next stage in the saga is not clear, Warsaw appears to be taking a more cooperative attitude than in the past by consulting at an early stage.

Poland has often been criticised by the Commission for its brusque attitude to policy disagreements, and is expected to come under fire in the institution's opinion on its suitability for EU membership next month.

Developments in its automotive sector are of particular concern to the Union, as it promises some big opportunities for European manufacturers.

“Poland is one of the most interesting countries for the automotive industry; it has well-skilled workers, low wage costs and an existing automotive industry to provide the necessary infrastructure,” said Heinz Handtrack, of the European Automobile Manufacturers Association (ACEA), recently.

Fiat already manufactures its compact Cinquecento in the country, and General Motors produces Opels there.