Germans toughen rules to protect automotive technology

By Jens Meiners, Automotive News Europe

Munich, Germany - German suppliers applaud a tightening of guidelines to safeguard their innovations. But some question whether their pact with automaker clients will be effective.

A new agreement forged by automaker and supplier members of the German auto industry association (VDA) calls for secrecy in dealing with product and innovation plans, blueprints, renderings, models, computer-aided design data and process expertise.

The pact is significant because Germany is the heart of the European auto industry. It is home to the region's biggest automaker, Volkswagen, and the world's largest supplier, Robert Bosch.

“Large suppliers like us place great value on the protection of intellectual property,” Bosch spokesman Thomas Knoll said. Bosch applied for more than 2800 patents in 2005 alone.

Said Ivonne Junghänel, spokeswoman at Siemens VDO Automotive in Schwalbach. “Siemens VDO welcomes the new guidelines. They ensure the faithful and successful collaboration between suppliers and OEMs.”

Claus Vogel, member of Plastic Omnium Germany's advisory board, said the pact would build trust. “I am confident it will lead to more open relationships,” he said.”

Partmakers' expertise often ends up with competitors, various industry sources said. They say this happens, for example, when, during the bidding process, an automaker finds another supplier who can do work for a lower price.

The new agreement seeks to curtail those practices by making its rules binding wherever no separate agreements are in place.

“The value of the commitment is that both sides have signed it,” said VDA spokesman Eckehart Rotter. “It is more detailed than our previous agreements and therefore represents an important step forward.”

Rotter said the VDA would not sanction violators, but he noted that the agreement is binding: “Both sides have committed themselves.”

While everyone likes the intentions, some suppliers are skeptical about the actual implementation.

“I believe it is a nice gesture, a positive sign that there is the wish to improve relations,” said a Tier 1 supplier source. “But times are so tough that I am skeptical the agreement will change things in the short term.”

Another supplier source said: “These are nice words which I hope will bear fruit. There is little property or patent protection right now.”

Christoph Stürmer, senior automotive analyst at Global Insight's Frankfurt office, said there is a need to stop carmakers from taking blueprints for a certain part to another supplier. “But there also has to be a limit to protecting suppliers,” he added. “You cannot force an OEM to start developing a part from scratch when they switch a supplier, just because the first supplier proposed a similar part. That would lead to high additional cost an inefficiencies.”

Stürmer said that “in essence, this is an appeal to the ethics of all involved.”

From Automotive News Europe (A Crain publication)