UPDATE 1-More EU words than deeds for ailing carmakers

Thu Nov 8, 2012 10:06am EST

* Doubts over how much cash available for innovation

* Industry divided on implementation of new standards

* Critics say strategy does not go far enough (Updates with quotes, detail)

By Barbara Lewis

BRUSSELS, Nov 8 (Reuters) - Europe's industry boss said there were limits to what he could do to prop up the region's ailing carmakers, a crucial part of the economy.

Carmakers in the region have closed factories and shed thousands of jobs as the economic downturn erodes demand.

Last month, Ford Motor Co said it would shut a Belgian factory employing more than 4,000 workers, the third time this year a mass-market carmaker had announced plans to close a plant in Europe.

European Union Industry Commissioner Antonio Tajani on Thursday promised urgent action "to address this sector's current difficulties and restructuring in a co-ordinated way".

He will gather industry leaders, workers' representatives and top politicians to address issues such as overcapacity, investing in new technologies, and state aid.

"I will try to do everything in my capacity to prevent factory closures," Tajani told reporters.

"The problem of restructuring is it's not for us (the European Commission) to say you must close or not close (a plant)," he told reporters.

The Commission's latest strategy, Cars 2020, focuses on an innovative, competitive and increasingly green car industry, although the policy for cutting carbon emissions had to be realistic, Tajani said.

"The strategy balances the struggle against climate change with the need for competitiveness," he said. "If we want to help competitiveness, we need innovation and clean cars."

The European car industry spends close to 30 billion euros ($38.3 billion) a year on research and development. Tajani said the Commission was proposing up to 2 billion euros towards that, but the money will have to argued over by EU member states.

Tough negotiations over the bloc's 2014-2020 budget are likely to reduce all funding.

GREENS, INDUSTRY WANT MORE

Critics from all sides wanted more.

"This is necessary but not sufficient," Ivan Hodac, secretary general of the European Automobile Manufacturers' Association (ACEA), said in a statement. "The EU should urgently use all the means at its disposal to mitigate the social and economic consequences of this process."

Environmental campaigners said decisions that will shape the sector's future need to be taken now to ensure long-term competitiveness.

"The industry constantly argues it needs long lead times to make regulations. That is why we should be agreeing fuel economy standards for 2025 now," Greg Archer, vehicles programme manager at campaign group T&E, said.

So far the Commission has proposed 2020 emissions standards, but beyond that, Thursday's strategy document says only it will "start a broad consultation on C02 regulatory policy".

Those working in the estimated 12 million direct and indirect jobs the European car industry provides are divided over how the goals so far should be implemented.

They are locked in a technical debate over how to share out the task of achieving average 2020 emissions of 95 grams of carbon per kilometre (g/km) across the EU fleet.

German manufacturer Daimler, for instance, says the Commission's existing method of using a calculation based on mass is best - as opposed to a footprint approach, based on the area of the vehicle between the wheels.

The footprint method is used in the United States and some of those involved in the manufacture of lighter cars argue it is fairer and more cost-effective.

The Commission was in general "committed to supporting the manufacturing industry", said Hartmut Baur, senior manager for environment, energy and transport policy at Daimler.

But differing policies from the many Commission departments could be a problem. "We face legislation which sometimes is contradictory and has negative impacts," he said.

It was too early to set goals beyond 2020, he argued.

"We need first to be able to assess the role of electric vehicles," he said. "A revision with a concrete 2025 target should be made not before 2016/2017." ($1 = 0.7840 euros) (Additional reporting by Philip Blenkinsop; Editing by Erica Billingham)

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