Valeo seeks higher EU content requirement

Valeo, a major automotive supplier, is urging the European Union to increase the required European content in vehicles labeled "Made in EU" from 70% to 75%. The company argues that this change would help preserve jobs and maintain industrial production within Europe.

Job losses feared without EU content rule

Valeo’s chairman, Christophe Périllat, estimates that up to 150 automotive-related factories in Europe could close if the EU does not raise the threshold. He claims each percentage point of European content corresponds to about 15,000 jobs, meaning 75,000 jobs could be saved by increasing the requirement to 75%.

Focus on value, not just final assembly

Valeo is also pushing for the calculation to consider the value of components made within the European Union, rather than just final assembly. This would prevent manufacturers from importing key parts and assembling cars locally without contributing significantly to local production.

Industry-wide concerns and restructuring

The call for a "Made in EU" label comes amid broader industry concerns. Major automakers like Volkswagen, Mercedes, and BMW are restructuring, with significant job cuts expected. Bosch, a competitor to Valeo, is planning up to 22,000 job cuts by 2030.

Global competition and industry shifts

While Chinese competition is a factor, other issues like energy costs and the shift to electric vehicles are also affecting traditional automotive suppliers. Electric cars have fewer mechanical parts, reducing demand for components like engines and transmissions, which Valeo and others specialize in.

Challenges of repatriating production

Raising the EU content requirement may help protect local jobs, but it does not address the need for competitiveness and technological innovation. European automakers have long offshored production to improve profits, and now they face challenges in rebuilding supply chains that have been disrupted over decades.