EU Promises Aid to Ailing Auto Industry

The EU has unveiled its Cars 2020 initiative, which pledges to help the region's auto industry climb out of an expected 17-year low in vehicle sales this year.

The EU says its 2012-2014 budget will propose doubling R&D funding for "green" technologies to about €2 billion. The European Investment Bank will ease availability of credit to automotive companies.

Cars 2020 also would support balanced trade agreements, worker training and efforts to ensure that regulation of emissions and other issues don't hurt the competitiveness of European automakers.

EU Industry Minister Antonio Tajani plans to meet with carmakers, unions and government officials from across Europe on Dec. 10 to discuss a coordinated response to excess production capacity, new technologies and competitiveness issues.

Tajani says "urgent action" is needed to help the auto industry. He tells reporters he will do everything he can to prevent factory closings. But Tajani adds that automakers are ultimately responsible for such restructuring decisions.

Critics say the EU's program falls short. Analysts note that it does not address the industry's key challenge of reducing excess capacity and shedding jobs.

Carmaker organization ACEA urges the EU to go farther by creating a "supportive framework and strong industrial policy." The group says government should find ways to keep jobs and production in Europe and improve labor flexibility.