Corporate Social Responsibility in Automotive Industry

Executive Summary

Automotive Industry is one of the biggest economic sectors in the world and the impact they have to the communities in their best practices has a huge advantage promoting corporate social responsibility. We looked and discussed various issues of CSR in the report not limited but including: Investing in the Future, Technology Drives Change Electric cars, Materials and Workforce Implications. Global Automotive Industry

The global automotive industry involves the manufacture and sales of automobiles and other retail activities, such as gas-station retail and the sale of car parts. The industry’s yearly growth rate is expected to exceed 5. 5% from 2010 to 2015, reaching a value of more than $5,132 billion by 2015, according to research from MarketLine. The industry is a leading employer throughout the world, with 9 million people involved in making 60 million vehicles, or 5% of global manufacturing jobs. Indirect employment from automotive activity is fivefold, representing 50 million jobs connected indirectly to the auto industry.

Regional Market Share * US vehicles sales and production account for around 40% of the global automotive industry, according to Global Automakers, whose members have contributed close to $45 billion to US automotive activity. The investment represents 300 facilities and employment for around 80,000 people with a combined yearly payroll of $6 billion. Leading US manufacturers include Ford, General Motors and Chrysler Group. * The European automotive market is led by production in Germany, Italy and France. In the EU, the industry employs 2. million people directly and almost another 10. 5 million indirectly, according to the European Automobile Manufacturers Association. The region produces more than 17 million vehicles a year, representing a quarter of overall global production. * Overall, Japanese market share fell around 4% year-on-years to just under 35% in August 2011. Japan holds around a 45% share in both the compact car and compact crossover markets, and 48% in the mid-size car market, according to a Kelly Blue Book report AUTOMOTIVE INDUSTRY CSR ISSUES|

Human Rights| * Commitment to HR and the UNGC, respect human rights delineated in the International Bill of Human Rights * Ensuring that HR and WC are met throughout the supply chain * Vehicles have to meet high quality and safety standards before being available for the public * Companies have to be committed to educational and health programs and work close with governments and NGO’s in this direction| Labor Standards| * Rejection of forced labor and child labor * Rejection of discrimination in employment and occupation * Low-Cost Labor and bad working conditions in developing countries * The manufacturing of vehicles is concentrated in developing countries due to the cheap labor and unskilled workers * Respecting the freedom of associations and unions * The companies should consider the flexibility and stability of employee’s job security when they shift from well-trained, high-skilled work force to low skill and wages job| Environment| * Reducing greenhouse gas emissions (GHS) * Developing advanced vehicle technologies * Hybrid vehicles and advanced diesel * Reducing the environmental impact of the plants * Reducing the impact of waste by recycling the products * Commitment to decrease global water use * Providing road safety in developing countries * The objective of these projects is reducing car accidents * Trainings aimed at increasing usage of seat belt and helmet * Ensuring that Green Supply Chain Management incorporating ecological aspects into the whole value chain| Anti-Corruption| * Expanding of automotive industry in BRIC countries, as well as Indonesia, Mexico and other developing countries * Auto companies may be vulnerable to bribery demands by custom clearance, government officials and third party agents * Transparency * Introducing mandatory online training courses for employees with focus on ethics, conflicts of interests, gifts and favors|

Consumers complained about situation but Toyota did not take responsibilities. After investigations were done, Toyota understood the big mistaken they have made and finally apologize to its consumers. Second, Toyota as s group has not signed the 10 principles of the UNGC. Particularly in China, Toyota has not respected workers in different factories. At the same time, there has been different complains in regards to the lack of respect towards labor unions. As mentioned previously, Toyota is one of the leaders for the development of friendly environmental innovative technology TATA Tata in general has poor performance regarding CSR issues discussed. There are many problems in all areas.

Though environment sustainability drive is in the core business plan of Tata motors and CSR is incorporated in their article and memorandum, it is strongly recommended that monthly reports to be shared with public and also the ways how they measure GHG and other gases emission and what steps they are taking in future to reduce water and air pollution. Finally though Tata is transparent company in her act and it’s a visionary company, but in few instances employees of Tata found involved in some unethical trade practices just to get benefit out of it, i. e. in singur land acquisition case it is claimed that Tata motors are involved in bribery to west Bengal government machinery. Also in big government tenders or military purchases Tata motors involved in bribery to get that order. Tata is signatory to UNGC but there is no means to control and check anti-corruption reputation of Tata. DAIMLER Daimler gets a high ranking in human rights and CSR pillars implementation.

Promote Daimler’s sustainability and corporate social responsibility (CSR) agenda in every country they have operations is by serving as liaison to UN Global Compact; organize Daimler’s annual Sustainability Dialogue to increase visibility as a leader in CSR and exchange ideas on innovation and environmental stewardship, strategies for community engagement, and CSR in the supply chain.? Support EAPP sponsorships and events by ensuring compliance with corporate regulations, i. e. draft sponsorship agreements, oversee communications initiatives, monitor progress, and ensure contract provisions have been carried out as agreed upon; Daimler, the owner of Mercedes-Benz, admitted to paying tens of millions of dollars of bribes to foreign government officials in at least 22 countries. The company said it had now reformed the way it did business. FORD Low ranking on environment and high ranking on human rights.

Working with industry companies, governments to establish effective frameworks for reducing GHG emissions; In Europe since 1995, Ford has reduced CO2 emissions from passenger cars by 31 percent Ford-Firestone issue happened in 2000 when Firestone recalled 6. 5 million tires, mostly original equipment on Ford Explorer, the world’s top-selling sport utility vehicle. The lack of safety in supply chain – a report by the Institute for Global Labor and Human Rights said that a 21-year-old worker lost three fingers in a stamping machine at one of Ford’s suppliers in China and was inadequately compensated. Ford continues making and marketing its SUV line vehicles which are fuel-thirsty. Conclusion Investing in the Future: Automakers have announced billions in “green” investment in the US, Europe and BRICs industries.

But despite that huge investment a rebound in sales management appears to concerned management hence the slow pace of green about the rebound’s permanence. Technology Drives Change: The pace of vehicle technology change is accelerating. Vehicles are changing in response to consumer taste and expectations, higher safety standards, and the drive toward a low-carbon future. Greening of automotive transportation should focus the three sectors: Hybrid and electric cars, materials and electronics. Electric cars: The most noteworthy change is the re-emergence of the electric vehicle. The development of alternative forms of energy storage (primarily batteries) is rapidly progressing as is the case with the new Mercedes Benz E-class electric car.

Materials: The focus on green supply chain management will make vehicles lighter for improved fuel economy is a major driver in the development of automotive materials and forming. Workforce Implications: Today’s auto industry workers need systems thinking. That means that individuals must possess the soft skills that enable cross-cultural communication, collaboration and teamwork. Production and skilled-trades workers must adapt to an increasingly fast cadence of new product, process and technology introductions. Many of the workers displaced? from the auto sector will? need to transition to alternate occupations and we recommended that companies be flexible and provide stability to this issue particularly where there is a high practice of “contract workers”.