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Xavier Mosquet, a Detroit-based managing director and senior partner at Boston Consulting Group, led a team of 20 experts that advised President Barack Obama’s automotive task force in the wake of the 2008 Lehman Brothers collapse. The U.S. government eventually spent more than $80 billion to bail out General Motors and Chrysler, effectively taking over both companies as they went through bankruptcy reorganizations. Mosquet spoke with Automotive News Europe News Editor Peter Sigal on what’s different today.

How does the coronavirus crisis compare with the global financial crisis, which really took hold after Lehman Brothers collapsed in 2008?

That was a deep financial crisis that stopped the economy for a long time. Suppliers and automakers had had a number of difficult years [before the investment bank filed for U.S. Chapter 11 bankruptcy in September 2008], then everything broke with the financial crisis. This crisis is happening when most auto companies are reasonably healthy, which is a big difference. The other thing, and we will see how this unfolds, but 2009 was a long crisis, it took years to recover. In the past, health crises have been more U-shaped or V-shaped. They tend to be very deep and shorter because the underlying economic fundamentals aren’t destroyed. That’s something we have to be careful about.

What are your recommendations to help the European market recover?

“If the governments get it right I think we can master it. It’s not only about the economics, but also about how they manage the virus. We need to go deep and fast. No. 1, support for short-term unemployment would make sure everybody has a few months of relief. If you don’t give people adequate resources when they are forced to stay at home, you will create a social crisis that is worse than anything else. No. 2, government-backed emergency loans for automakers are a good idea. If you want automakers to extend faster payments to the supplier base, we will have to give them financial support. There is no way with the current balance sheets that they can do it themselves. I would also think about market support [in the form of government subsidies to encourage trade-ins of older cars]. I’m saying this with a bit of caution, but given the EU regulations in terms of emissions, I might use some of this stimulus to support electrified vehicles. That would help manufacturers sell the cars in which they have the most invested, and they need that mix to be compliant with the regulations.”

Should the EU reconsider its 2020 emissions standards and the potential fines for missing the target?

We have to be realistic here. We may have to rethink how we approach the threat of fines. There is no point in trying to support automakers on the one hand, and then fining them for a situation over which they have no control of. For consumers, buying expensive electric vehicles will be even more difficult in the current context.