Ed 1 Vol 3 2013
-AutomotivePowered by
In this edition:
Joaquim Ferraz-Martins - Renault Wolfgang Lehr - Carglass Laura Háray-Takács - Audi Marcela Barreiro - Daimler
Peter Mišák - Škoda Selale Orkide Serengil - Borusan Otomotiv HR Corner - Ángel Gutiérrez
Interview With Joaquim FerrazMartins, Legal Director Brazil, Renault ............p. 4 Interview With Wolfgang Lehr, Regional General Counsel Belron, CARGLASS .......p. 5 Interview With Dr. Laura HárayTakács, General Counsel and Head of Compliance Hungary, Audi ..p. 8 Interview With Marcela Barreiro, General Counsel & Secretary Mexico, Daimler ..........p. 11 Interview With Peter Mišák, Head of Legal Slovakia, ŠKODA Auto ...p. 13
Interview With Selale Orkide Serengil, Legal Affairs Manager, Borusan Otomotiv Turkey ............p. 16
HR Corner: José Ángel Gutiérrez, HR Director , Daimler .........p. 18
“Please, just talk to
me!” By Luciana Gualda, Ache Laboratorios, Brazil ..............p. 20
“Competition and the
connected car: Which road ahead?” By Dr.Thomas Funke, Osborne Clarke, Cologne and Brussels
.......................p. 21 “Mexico’s auto-part
industry” By Rodrigo Rojas Robleda, González Calvillo, Mexico...............p. 22
“Is sustaining the
automotive industry a government priority?” By Alin Chitu, Tuca Zbârcea & Asociatii Tax Romania............p. 24
“European block
exemptions in the automotive industry” By Mgr. Michal Kohn, Ružicka Csekes, Slovakia.............p. 26
This was probably the most exciting issue for us to work on since we launched the GC Grapevine project two years ago – and how could it not? It is hard not to get buzzing - especially for car-enthusiasts such as the members of this editorial team - when we think of the automotive industry. And gosh, what a treat working on this issue has been. We had the opportunity to talk to GCs equally excited about their industry whose eyes sparkled every time they spoke about the cars they are producing. At the same time, we had the opportunity to visit a manufacturing plant the size of a small town where we could not help but hope to catch a glimpse of the latest super-car speeding down the testing track. Our ‘toys’ infatuation aside, we have plenty of other reasons to be excited. Since May, 2011, when the GCG first went to print we have grown from the idea of an in-house-targeted newsletter with 200 readers focused on Hungary to a pan-regional publication covering almost all markets in the CEE and with a subscriber base of over 3000 senior in-house counsels. Our drive to continue expanding the project has lead to the first issue of Volume 3 to also include another ‘emerging markets’ continent: Latin America. The timing and choice of focus could not have been better with the Automotive industry booming in both Mexico as well as Brazil, the two markets that we have added to our span. We have also added a new section for our readers - the HR Corner. In this issue and the following, we will aim to explore within this section two main elements: (1) the perspective of another function of a company - that of an internal client and what adds value from the legal function for them; and (2) the perspective of the function that recruits a potential General Counsel to explore what their understanding of the company’s needs are and how they go about identifying the ideal candidates to address these needs. Lastly, our GC Grapevine community on our portal keeps on growing. Aside from hosting all of the articles from past editions as well as exclusive interviews and articles you can visit us at www.gcgrapevine.com to express your thoughts, communicate with other lawyers across the world, and increase your ability to reach potential clients and counterparts. Please let us know – electronically or by contacting me directly – if you would like to learn more. Orsolya Endrefi Associate Director Emerging Europe and Latin America Legalis Global
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Joaquim Ferraz-Martins, Legal Director Brazil, Renault - Brazil JFM: I am responsible for all legal matters of Renault for Brazil. A lot of my day is spent on managing all the relationships with the car-dealers’ network: negotiation of new agreements, amendments and termination, etc. At the same time, I cover matters related to tax and labor litigation.
every important bit of information must be in one, maximum 2 power point pages in order to ensure it is properly processed and understood. This means that we need to apply ourselves and offer really sharp and to-the-point legal analysis on any question that is presented to us.
I have a team consisting of 9 lawyers of several seniorities, 3 interns, and 2 assistants. Running this team is myself as the Legal Director. The structure of the team also includes one Legal Manager and one Legal Supervisor while the others are in-house L: You have cumulated over 25 years counsels. of experience working as an in-house counsel. Can you describe your career path for our readers?
At the same time, the managerial side of my role represents a challenge in itself. For example, with a considerable in-house team such as mine offering a clear career path to all of my team members and managing their career expectations is quite a challenge.
JFM: I graduated from the Faculdades Metropolitanas Unidas Law School in 1989. My legal career, however, commenced during my university years. Between 1984 and 1987 I worked as a trainee at a law firm. My first in-house role (1 year) was with Crédit Commercial de France right after. In 1988 I moved to Banco CCF Brasil where I started off as a legal assistant. By the time I left in 1999 I was the Legal Manager for the Corporate Affairs Department. Having worked in-house for 12 years by that point, I decided to also try ‘the other side’ of the legal world and worked in private practice for one year at Fischer & Forster Advogados / L.O. Baptista Advogados It was not long until I moved back to an in-house role with HSBC Investment Bank Brazil where I had the role of Legal Department Manager. In 2003 I moved into my current company, Renault Brazil. In 2010 I also took on the role of President of the Board of Directors and Executive Board of the France-Brazil Chamber of Commerce. L: Please describe for our readers your current role (eg, responsibilities, size of team, structure).
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“no matter the size and complexity of a legal question, the conclusion with every important bit of information must be in one, maximum 2 power point pages”
L: Renault cooperates with many other car manufactures like Nissan, Samsung and Daimler. What legal issues, if any, result from such cooperations?
JFM: I know very well the relation of Renault and Nissan in Brazil since we share a factory and we have already rendered legal services to Nissan. Indeed, overall, I can tell you that Renault and Nissan have a very On top of our regular legal responsibilities, good and strong relation in Brazil. while the legal department is not responsible for tax planning, we are asked to give The Renault people from other countries our opinion on important issues in order always ask how can we succeed on this to evaluate risks and to mitigate possible matter and the policy established by Carlos consequences. Ghosn is the key answer: to respect and to take advantage of the differences. L: What would you say is the most challenging part of your job? Of course some times we are discussing some matters and a difference in opinions JFM: Since Renault has a very good legal brings us to a disagreement but we know department the legal questions that arise that it is only each team defending their are not so difficult to tackle. However, companies interests and we have internal since Renault changes the Brazilian CEO ways to solve this kind of problems. On every 3-4 years as well as other financially the other hand, it is incredibly useful when responsible executives, it is a very interest- Renault can act on behalf of Nissan before ing challenge to constantly bring them up third parties or vice-versa. Regarding Reto speed and explain the difficult and com- nault-Samsung in Korea or the cooperation plex legal Brazilian system. with Daimler I do not know as much since my focus is on Brazil but I already talked One element that I had to train myself into several times with the responsible for leis that, no matter the size and complexity gal matters with this companies and I can of a legal question, the conclusion with assure that we have a very good win-win
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nowadays, we started having the opportu- CZECH REPUBLIC nity to be heard and the company is very L: The French state owns 15.01% of the interested on all Brazilian matters. CMS Cameron Mckenna Renault shares, which makes it the biggest individual shareholder. What in- L: If you would be a lawmaker within Advising Neturen fluence does this have on your company the automotive sector for one day, what and on your operations in Brazil? law would you change? relation with all our partners.
do his work. Of course, there are always some issues that come up frequently when the union workers talk about the transfer of production from France to other countries or the reduction of employment in France. Regarding our operations specifically in Brazil, I do not think the French state tries to influence much of what and how we carry out our business.
L: With the Brazilian Carlos Ghosn as Renault’s CEO, do you see any Brazilian influences within the company? JFM: I do not think we influence Renault because Carlos Ghosn is Brazilian – at least no real influences I could put my finger on. On the other hand, as Brazil is the most important market for Renault after France,
sumer protection regulations can be improved. All things considered, it is the fiscal legal system that is the most important DLA Piper issue the Congress must simplify.
L: What would be your best advice for a DLA Piper supported VIG in the acquisition of prime office building in freshly appointed General Counsel? Prague. JFM: I consider ensuring the rigor on the legal analysis that he/she and the legal VIG FUND uzavrený investicní fond, a.s., team offer is the most important concern member of Vienna Insurance Group, acfor all freshly appointed General Counsel. quired from Austrian IMMOFINANZ Group Secondly, I would say that the way to suc- the BB Centrum Building C, a prime office ceed on big cases is to pay attention to the property in Prague. small details. The General Counsel should encourage his/her team to really know the DLA Piper advised VIG Group on all legal details of the business and the situation at aspects of the acquisition, including due dilihand and not only the legal procedures in- gence, transaction documentation and closing issues. volved.
The Private Practice Strip
Advising Neturen, a Japanese company manufacturing compornents for the automotive JFM: The French State is represented on JFM: In Brazil the relation between car industry, on greenfield development in the the board of directors of Renault in France manufacturers and the car dealers deserve Triangle industrial park located in Ústí nad but they give Carlos Ghosn a free hand to a clarification. At the same time, the conLabem.
Wolfgang Lehr, Regional General Counsel Belron, CARGLASS - Germany L: Let’s start with a bit of background information about you. Could you describe our readers your career path leading up to your current role?
Counsel - Continental Europe, Asia & Latin America. Our Group is the worldwide leader in the business of repair and replacement of vehicle glass operating in 35 countries with 25,000 employees and generatWL: I worked 6 years in the Legal Depart- ing annual sales of EUR 2.6 Billion. ment of Mitsui, one of the largest Japanese multi-national companies, mainly in Düs- L: How would you describe your role as seldorf and partly in Tokyo. Thereafter, I a GC to our readers? was appointed as the Head of the Legal & Insurance Department of FUCHS Petrol- WL: I am responsible for a team of 15 inub AG, the worldwide leading company house lawyers located in different counfor automotive and industrial lubricants, tries, who support the legal function. I listed on the Zurich and Stuttgart stock advise Management Teams in the different exchange. In 2001, I joined the Carglass/ countries on major strategic decisions, enAutoglass Group as the Regional General sure compliance and negotiate M&A deals
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L: Since a GC role implies a lot of management duties, what best practices have you developed over time in terms of developing your in-house team?
Weinhold Legal advised Cognitive Security and certain selling shareholders on the matters related to the sale of 100% of Cognitive Security s.r.o. to Cisco Systems, completed in February 2013. Cognitive Security s.r.o., a privately held company headquartered in L: At the same time you work together Prague, provides security software that is with many partners and suppliers. How focused on applying artificial intelligence do their own policies or their different techniques to detect advanced cyber threats.
Asian or Latin American jurisdictions as you may get surprises”
WL: The personal development of our inhouse lawyers is key, not only related to legal and technical skills, but also to emotional intelligence, such as coaching, team jurisdictions interfere with your own building, influencing, presentation and policies? conflict-solving skills. WL: Our co-operation partners are often Furthermore, we offer development major international and national insurers as through secondments to other countries well as multi-national Lease & Fleet comand law firms, individual coaching and job panies listed on the stock exchange with enlargements. Our annual 360 degree per- strict compliance policies in place. Obviformance review gives excellent feedback ously, if we want to be their service providfor each in-house lawyer and is the basis er, we need to comply with their policies for her/his further individual development and therefore, have implemented our own plan. strict compliance rules and regulations.
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Advising on merger of two of the three largest Czech fixed-odds betting companies Weinhold Legal provided complex legal services in connection with acquisition of Chance, #3 Czech lottery company involved in fixed-odds betting, by Tipsport, #1 Czech lottery company involved in fixed-odds betting.
L: You work as a regional General Counsel in Belron, which means that for a lot of different issues you would have to deal with the global GC or GCs for other jurisdictions. How does this relationship work in a global company present all over the world? What are the main challenges that arise and how do you overcome them?
L: When it comes to choosing your part- The acquisition was realised through a purners and suppliers, which kind of things chase of shares combined with a corporate do you look up? Does your department de-merger (spin-off). participate in this decision?
WL: In countries where our annual turnover is in the range of EUR 80 to 100 Million we usually have a local in-house lawyer responsible for it. In countries with lower sales we have an in-house lawyer located in another country (usually Germany, France or UK) and directly supporting it if she/ he speaks the local language - we cover most European languages in our legal department. Otherwise we work through a locally appointed law firm. Dealing in EU countries is usually much easier for us than dealing with Asian or Latin American juris-
Weinhold Legal has been selected to carry out a comprehensive implementation process of the brand new civil legislation (new Civil Code and other laws substituting more than 200 current laws - effective 2014) into the whole contractual documentation of several financial institutions.
WL: The selection of our partners and Advising the largest banks on imsuppliers is done by the responsible com- plementation of new Czech civil mercial departments. We only interfere, if legislation we see major risks, such as credit risks or compliance risks. L: Whenever people think Germany, the automotive industry is one of the first ones that come to mind. What do you think has led to this success?
WL: I believe that German automotive manufacturers have a strong drive for innovation, increase of productivity and high These included one of the three largest banks, a leading mortgage bank, a leading quality. construction savings bank, and several other In terms of design they have made major institutions.
improvements over the past decade and, in
The Private Practice Strip
and major commercial agreements, such as dictions as you may get “surprises” in terms co-operation agreements with insurers and of the concept of the laws, legal certainty CZECH REPUBLIC Lease & Fleet companies, supply agree- and the very long duration of litigations. ments and manage major litigations. FurWeinhold Legal thermore, I am responsible - on a world- “Dealing in EU countries wide level - for all IP rights of the Group Advising on Cisco Czech acquisition and the legal support for the Sales & Mar- is usually much easier keting function. for us than dealing with
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HUNGARY
L: How do you manage the VGRR (Vehicle Glass Repair and Replacement) brands? To what extent are you involved in ensuring compliance with your operational standards?
DLA Piper in Hungary is advising one of the leading players in the automobile and motorcycle industry in connection with a significant data protection project where, due to a restructuring within the global operations of the client, the data basis of local operations were centralized, raising several legal and compliance issues in respect of data transfers.
“ If you do a job, do it with all your heart and passion!”
According to the “repair clause” car manufacturers can exercise their design rights relating to visible body parts for new cars, but not for the purpose of repairing or replacing a visible body part. This ensures free competition in the after-market and, WL: Our trademarks are globally man- as a consequence thereof, lower prices for aged by my team member in Zug, Switzer- the benefit of consumers and insurers. land. All registrations, oppositions, renewals and litigations are initiated from our L: What is the best advice you ever reZug office in co-operation with the respec- ceived? tive business unit. Regarding operational issues we are responsible to ensure com- WL: If you do a job, do it with all your pliance with the law and technical norms. heart and passion!
DLA Piper Advising on a wide range of legal issues Providing full range of legal services to AWC Industries / Wild Manufacturing Group Ltd., a manufacturer of automotive parts. Our services include advice on manufacturing and supply agreements, employment related issues (including employment litigation), health and safety issues, advice in connection with public utilities as real estate matters.
Advising Magna Car DLA Piper in Hungary is advising Magna Car Top System GmbH in Hungary in relation to a joint venture with the Parat Group to produce cabrio car top systems.
The Private Practice Strip
my opinion, have now great models on the However, the determination of the level of market. operational standards is the responsibility of our Operation Department. L: What drew you towards this sector? L: Belron started developing a franWL: After-market service in the auto- chise strategy for development in 2000, motive industry is a fascinating sector. I primarily using its Carglass® brand. personally love cars. There are constantly What kind of impact does such a stratnew developments relating to vehicle glass, egy have on your department? e.g. new electronic features, new designs, models and shapes. Also, the range of legal WL:We are responsible for the negotiation challenges in this sector is exciting for me. and conclusion of all franchise agreements. The franchise business is primarily a strategy for countries where the insurance rate against glass breakage is very low or where we see high market risks. Our franchise business is mainly in Eastern European L: Belron is a partner of the main countries and Chile. If a franchise country global insurance companies around the is developing very well and the business has world. Could you briefly describe the reached a certain size we aim to acquire nature and drive of the partnership? such business from our franchise partner and the related M&A work will also be WL: We co-operate with most multi- handled in my department. national and national insurers in various countries. We support insurers in their L: What do you foresee will be the upclaims handling, have established effi- coming pieces of legislation that will cient processes, such as electronic insur- impact (either positively or negatively) ance verification and billing and render your company the most in the near fuan excellent service to their policyholders ture? through 24/7 service, mobile repair, direct billing to the insurer and a life long work WL: For me, the most important piece guarantee in many countries. If the insurer of legislation is the implementation in the recommends a high quality service partner, EU design regulation of the “repair clause” like Carglass®, the policyholder is likely which will protect free competition in the to be satisfied with the handling of her/his after-market. The “repair clause” is impleclaim and, as our market research shows, mented already in the majority of the EU the probability of renewing his insurance countries, but unfortunately not yet on a policy increases. pan-European level.
Magna is the most diversified automotive supplier in the world.
Advising a key player in the automotive industry on legal and compliance issue related to data transfers
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Dr. Laura Háray-Takács, General Counsel and Head of Compliance, Audi - Hungary man legal function (by plan). Over time, we could prove for the management that having an own legal department is a very effective way of dealing with the legal issues of the company. As a consequence we incrementally increased the in-house team. At the moment, my team comprises of 6 lawyers.
Of course, this implies a specific set of skills. One needs to look for the core legal issue and concentrate on that without getting distracted. Communication is also crucial. We need to get to the point. As a lawyer, moving in-house means having to (re-)learn how to communicate simply and provide clear answers.
This means that at the moment, my main focus is on providing strategic legal advice to the business. At the same time, I act as the compliance officer of the company and, of course, I need to keep up with my manaL: So that our readers get to know you, gerial responsibilities. As the team grew, I please tell us about your legal career found myself focused more and more on leading up to you joining Audi? the latter however, since the team is not so big yet, I still have the opportunity to inLH: I started at a law firm that was associ- volve myself in daily legal matters. ated with one of the Big 4. After a while I joined Squire Sanders in Budapest. From there, I was sent on a secondment for Audi following which, in 2004, I joined the company as an in-house counsel.
Since communication is a two way street, I also had to adapt to the lingo used by our specialists in the core functions. Technically oriented people tend to express themselves quite short and quick meaning that you need to catch every word. In order to do that you have to learn this language: “EOP & SOP” - end of production & start of production - or “ZP8” - the last point in the production of a car are just examples of the terms that are specific for the automotive industry.
“Volkswagen and Audi have their own internal rules and ‘logic’ - given their size”
L: When you first joined, what was your induction process like? How did you fa- L: You mentioned strategic legal advice. miliarize yourself with the company? What are the main boxes a GC needs to check before board members trust him LH: One of the first steps was to learn or her? about the production side - the core business of the company. I even spent a few LH: Regarding the strategy-focused aspect days on the ‘shop floor’ in the manufactur- of my role, I would say that it is crucial to ing plant. This was crucial since it allowed learn the business. Volkswagen and Audi me to really understand the quality factors have their own internal rules and ‘logic’ in the field of engine manufacturing and as- - given their size - which you must unsembling cars. It also instated a real passion derstand in order to implement any type about what we do as a company. of strategic change. Once you have done that, you will be able to adapt your way of Naturally, to become familiar with such a providing advice to the company’s real exhuge company is a longer process, and re- pectations. quires continuous learning . At the same time, working in-house also L: Tell us a bit about your current role. means the need to be quick. You no longer What are the main aspects of your job? have the luxury of having weeks to analyze a specific issue. As long as you always conLH: I would say the nature of my role has centrate on how to facilitate solutions with changed quite a bit since I’ve joined Audi risk minimalization, you will definitely be in 2004. At the time there was only a one- appreciated.
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L: Audi does not cover only production in Hungary but R&D as well. How do you handle such a broad set of activities that need legal advice? LH: Indeed, the operations here are quite varied. The plant in Gyor was until recently foremost an engine production plant (it builds engines for the whole Audi and Volkswagen group). At the same time, we cover car production, a tool shop, engines and car development as well as other supporting functions and shared services for the group. It is quite a challenge. From my perspective, the factors that contribute most to our success is having a small team of qualified and motivated professionals combined with a very close relationship with the central legal department of the Audi AG and other group companies. We also work together with external law firms, of course. L: Since you mentioned your in-house team, do you tend to specialize your
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team members on one area/focus or ro- LH: There are a number of elements that tate them to develop them all-around? plug into this. Of course, we, the legal team, make an active effort in staying apLH: I generally opt for a mix of the two. prised of upcoming changes. At the same In Hungary, after graduation lawyers need time, we share this responsibility with the to gain experience for about 3 years prior various specialized departments (such as to obtaining their Bar qualification. During Environment, HR, and so on). We discuss this period, I tend to rotate them to gain with them updates and if issues arise, we exposure to as many areas and relevant le- help out by clarifying them. To their credit, gal fields as possible. Following their quali- the other departments are generally very fication I tend to specialize them based proactive on this. This is crucial since, at on both their preferences as well as their the end of the day, they will implement strengths. these updates and are the ones that understand the operational implications of any L: Many GCs in Hungary talk about new piece of legislation. an ever-changing regulatory climate. How do you keep up with the regulatory At the same time, external law firms are changes? quite proactive on announcing changes
with great impact such as in the case of the new labor code coming into force in Hungary. Last but not least, because of our size, the government tends to include us in the discussions prior to passing pieces of legislation. L: Audi recently “cut the ribbon” on a new plant in Gyor. What were the ramifications for your legal team? LH: Indeed, in 2010 Audi decided to build a new car production plant in Gyor. The investment of EUR 900 Million involved a “full depth car manufacturing” plant, which is able to cover all stages of production (everything from chases through painting and assembly). Altogether, it meant adding
The GC Grapevine is powered by Legalis Global, the premier legal recruitment firm in Central Eastern Europe.
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ROMANIA Dentons (Formerly Salans) Advising German auto parts supplier Continental Aktiengesellschaft Salans Bucharest advised German auto parts supplier Continental Aktiengesellschaft in the context of a senior secured notes issuance by a US subsidiary having an aggregate value of 950 million USD. The project involved Salans teams from Bucharest, Bratislava, Budapest, Madrid, Prague and Warsaw, who acted as local counsel to Continental in their jurisdictions.
Raiffeisen Bank financing of shopping mall Salans Bucharest advised Raiffeisen Bank International AG and Raiffeisen Bank SA on cross-border EUR 30 Million financing for the development of a shopping mall in Ploiesti (developed by AFI Europe)
Advising on wind farm acquisition Salans Bucharest advised The Marguerite Fund and EnerCap Power Fund in their acquisition of 50% and 30% respective stakes in an 80 MW wind farm located in SouthEast Romania from Cyprus-based developer EP Global Energy, which remains a 20% shareholder. The transaction marks the first investment in Romania for either The Marguerite Fund or EnerCap Power Fund.
Advising GDF SUEZ in acquisition Salans Bucharest advised GDF SUEZ Energy Romania on taking over a 50 MW wind farm located in eastern Romania from a local developer.
The Private Practice Strip
2,100 new employees on the payroll bring- ternal counsel, I learned about the people ing the size of our Gyor operations to a to- who worked at Audi, the corporate spirit tal of more than 9,000 employees. and, not least, about the products. I will say, the latter is a rather emotional element As you can imagine, this represented quite for me. It is great to be able to see the end a challenge for us in the legal department. results of your work in a tangible product What was great was having the chance to that you can be proud of. be involved very early on, from the stage of negotiations with the Hungarian Government and local officials. At the same time, “It is great to be able to one of our colleagues was in Germany for see the end results of your a full year to provide advice on Hungar- work in a tangible product ian law as a part of the legal project team managed by a German lawyer. Legal advice that you can be proud of. ” was necessary primarily in the areas such as construction law, real estate law and fi- As to why I have been with Audi for this nancial investment law, environmental law long, I guess there are two aspects. Peoto name a few. This meant a considerable ple here are wonderful to work with. They volume increase of legal matters flooding are open-minded, focused on targets, and us at the same time. always full of new and exciting initiatives. At the same time, on the legal side, I have After 3 years of hard work of Hungarian to deal with a very wide range of aspects, and German colleagues, the new plant is which has always kept my job challenging ready to start the production. The official and interesting for me. “SOP” is the 12th of June. For example, I never thought that I’d be inL: Since you mentioned volume, I assume volved in M&A at Audi Hungary. Last year, you had to outsource quite a bit of legal we had an acquisition involving “Gyor-Pér work during this investment. What are Airport”. It was an interesting experience the criteria that you usually outsource since it is something very different than such work on? what we did before – both in terms of the industry focus and M&A altogether. LH: In general, I look for the level of experience. At the same time, we need support L: Audi is quite active in the country’s in German language quite often, a skill set life-cycle. This must also be quite rethat is not always there. One other element warding. that we look at is how fast they can deliver. Since German coverage is a strong need for LH: Indeed, for example Audi recently us we also look at their associated firms in established a German-Hungarian school the German market. Of course, we also in Gyor and we are now in the process of look at references, rankings and, not least, enlarging this school. We have a vocational budget implications. On this particular in- training program as well. We are also investment, it was important for us to have volved with the universities both by having someone with experience doing something different members of staff as guest lecturof this magnitude. ers as well as being involved in various faculties (even as a form of establishing new L: You have been with Audi for almost ‘Audi’ faculties) of the University in Gyor 10 years. What has been the secret of and in Budapest and in R&D activities. your tenure? Audi is committed to this part of the country and takes its corporate social responsiLH: Well, during my secondment I had the bility initiatives very seriously. opportunity to learn about the company from a unique perspective. Even as an ex-
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Marcela Barreiro, General Counsel & Secretary, DaimlerVehículos Comerciales - Mexico I hold a Bachelor degree from Universidad Nacional Autónoma de México and a Master degree in Business Law from Colegio de Abogados de Madrid. I also have two Posgraduate degrees in Financial Law & International Trade from Universidad Panamericana. L: How does your usual work day look like? What takes up most of your time? MB: My daily work is divided in two mainly tasks, one includes all the internal meetings, boards, and committees, where the new projects and the objectives are defined and the other one is making them happen. I work closely with my team to get the projects, the agreements, the negotiations, and deals done.
L: Just to offer a bit of background for our readers, can you please outline your In legal, we also dedicate part of our time career path leading to your current to internal training sessions regarding any role? legal matter that could help the company to comply with the legal requirements and MB: I joined Daimler in April, 2008 as internal processes. the Head of the Litigation department and, after 4 years, I was appointed Gen- L: Can you describe for our readers how eral Counsel & Secretary Mexico. In my you designed your in-house team? new position, I lead the legal department in providing legal support and direction to MB: In Mexico, the legal department the company’s subsidiaries located in Mex- provides services to all the business units ico. I represent the companies before third (Trucks / Buses / Vans / Passenger Cars/ parties in contracts, agreements, negotia- Holding Company). We are a team of 6 tions and disputes and provide legal advice lawyers and one Administrative assistant. to the companies’ management groups Aside from myself, there are 4 managincluding corporate governance, compli- ers: (1) a Litigation Manager, who hanance and strategic issues, and day-to-day dles all litigations for the entire group; decisions that may affect the company’s (2) a Corporate & Finance Manager, who business. I also act as secretary of the Board is in charge of all corporate matters such of Managers and Board of Managers’ com- as power of attorney and most of the legal mittees. work related to the holding company; (3) a Commercial Manager, responsible with Prior to joining Daimler, between 2005- handling the plants, suppliers, and the dis2008, I worked for a tax and foreign trade tribution and dealers network in Mexico; law firm and from 2001-2005 in a National and (4) a Legal Regulatory manager, who Development Bank, providing legal and coordinates all our regulatory affairs. The financial advice to all the bank’s depart- sixth (junior) lawyer and the Administraments. tive Assistant support them all.
L: As a general philosophy, do you believe in outsourcing as much legal work as possible or building a large in-house team? MB: In a company like Daimler both are needed. I believe in building a large inhouse team, which I have, but also in outsourcing. On one hand you need someone perfectly integrated with the business that can act quickly and bring savings to the company. People that are able to make decisions, that are familiar with the internal requirements and processes, therefore, building a solid and effective in-house team will improve the legal services in a company and will help the business to flow better and quicker. An internal lawyer is familiar with the core business and the company’s needs. Also, we need to balance the expertise and resources of the in-house counsel with the specialist skills of the external counsels. In some cases, especially in the litigation department, it is necessary to work with external firms, because of their expertise and the cost-benefit. The key is to decide the work that should be performed in-house and the one that should be handed over to the external counsels in order to get the perfect mix for the best interest of the company and to avoid any risk. L: When you do outsource to external counsels, what are the criteria you use to pick the firm you will work with? MB: It is a delicate task to decide who your external firm will be, considering all the responsibilities implied. Our criteria include the expertise, reputation, size, resources, relationship, skills, costs and rates. All of the above will be taken into consideration in each case. We have a pool of external firms so we assigned each case to the suitable external one that will undertake the work.
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plays a significant role throughout the world. ”
L: Several Amendments to the Federal Labor Law became effective on December 2012. What are these amendments and how will they influence automotive producers? MB: The amendments to the Labor Law in México (“The Reform”) are extensive actually and could be summed up as related to 5 main aspects - but the list is not exhaustive: (1) Equality: It stipulated for the prohibition of work that could implicate discrimi-
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ROMANIA Tuca Zbârcea & Asociatii The Romanian Authority for Privatisation (AVAS) closes the privatisation of local automotive company with Ford Motor Co. Tuca Zbârcea & Associatii advised AVAS in the final stage of the restructuring process under the privatisation contract concluded with Ford Motor Co. regarding the former Daewoo Automobile Craiova factory. The firm’s Mergers, Acquisitions & Privatisations team, and the firm’s Tax advisory arm advised the public authority on all stages of the post-privatisation process. The transaction which amounted to EUR 38 Million was closed in January 2013.
Piraeus Bank Greece sells its Romanian Subsidiary A multidisciplinary team of lawyers from Tuca Zbârcea & Asociatii specialising in Banking and Finance, M&A, Corporate and Commercial Law, as well as tax advisors, advised Piraeus Bank Greece on selling its Romanian subsidiary - ATE Bank Romania to a local investor following a transaction in excess of EUR 10 Million.
Lastly, if certain specific conditions are not met, workers of the contractor working in the place of work of the contracting party will be considered part of the contracting party for purposes of employee profit sharing. (3) It includes new types of labor agreements: Seasonal agreements - with the same rights and obligations of indefinite term employees; Trial agreements - to verify if the hired employee has the knowledge and skills needed for the position; and, Initial training agreements – under which, if the employee does not prove to have the necessary knowledge and skills needed for
Join our General Counsel dedicated group on LinkedIn Simply search for “GCG”
The Private Practice Strip
L: Why did you choose the automotive nation based on ethnic background, naindustry? What gets your blood flowing tionality, gender, age, social status, health when you think of this industry? status, religion, migratory status and sexual preferences. In terms of gender equalMB: I choose to work in Daimler because ity, it prohibits the request of certificates of the marvelous company we are and the of non-pregnancy in order to hire women, excellence of our products and brands. We as well as their firing for being pregnant. have more than 10 brands such as Freight- Furthermore, it provides women who liner for the trucks division, Mercedes- adopt a child the right to a six-week leave Benz for passenger cars, buses and vans, with pay. Lastly, it provides paternity leave, and Smart, among others. Daimler also has whether it is a consequence of a birth or an presence in the 5 continents in more than adoption, for five working days with pay. 200 countries with plants in more than 40 Of course, most companies already adhere countries. Daimler invented the car and to such standards but the Labor Law went the truck 127 years ago. for 70 years without amendments so it was about time to include such aspects. What really gets to me is thinking about the importance of the transportation of (2) Outsourcing: It regulates outsourcing goods and people, which plays a significant as a working regime by which an employer role throughout the world. At the same defined as contractor executes works or time, the automotive industry includes renders services through employees una wide variety of activities that challenge der its supervision in favor of a contracting me every day to improve, to learn and be party. aware of all the new developments and technical information. In the company, we The law obliges the contractor of outhave to deal with production, wholesales, sourcing to comply with the required docretail, maintenance of the vehicles, dealers umentation necessary for its operations, its network, among others. obligations before the Mexican Institute of Social Security (Instituto Mexicano del “What really gets to me Seguro Social) (“IMSS”), hygiene and environment working conditions, among is thinking about the others, requiring the contracting party to importance of the supervise that the contractor renders the transportation of goods Outsourcing services in compliance with the Federal Labor Law (Ley Federal del and people, which Trabajo) (“FLL”).
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the position, employers may terminate the labor relationship without any responsibility. To that effect, it will need a favorable opinion of the Joint Commission on Productivity Development and Training (Comisión Mixta de Productividad, Capacitación y Adiestramiento) if it has more than 50 employees.
MB: We are members of the Mexican Associations related to commercial vehicles and passenger cars and there, we are analyzing the impact of the oncoming laws and regulations, and amendments to different laws.
“people will perform better if they are treated with respect and trust”
(4) Pay per hour: This form of payment was already included in the FLL but is now expressly regulated. The Reform prohibits that any worker earning in a workday - be it one or eight hours – be less than one minimum wage daily salary. Therefore, even if a worker works less than a full eight-hour workday, his/her minimum wage daily salary will not be fractioned.
At the moment, we are working really close with all the amendments related to the energy industry and the environment regulations (reduction of emissions/fuel savings/hybrid technology and other future technologies).
(5) New grounds for termination: The most interesting aspect here is that it is the first time that sexual harassment is specifically regulated in labor regulations and included as grounds for termination of the labor relationship without responsibility for the employer, as long as it is proven.
L: Recent reports from the Mexican Automobile Industry Association, or AMIA, made the projection that up to 3.15 million vehicles could be produced in Mexico in 2013.What do you believe are the main competitive advantages that attract foreign producers in the country?
is true even despite the recent FLL regulations. We now have new different options on how to hire. We can, for example, now hire on a project-basis, which gives us considerable flexibility in terms of work force. Despite general fears in the market, the law will still allow for outsourcing via third party companies. We need to change the agreements but the impact should not be as negative as painted. L: What is the single best advice you received related to holding a GC role? MB: I will say I received one great advice related to my team and the other to my job. The first one was: “people will perform better if they are treated with respect and trust”, and that is how I am doing it, encouraging my team to work with passion and enthusiasm. We try to treat each other in a respectful, trustful, and dedicated manner. In other words, we are building strong relationships within the team.
The second advice was “not to take anyL: What other legislation projects do MB: I believe the main ones are the geo- thing personal”. That helps me perform you keep an eye out on in light of their graphic location and the quality and the better, focus on my job and get things done. potential impact on your industry? lower cost of the Mexican workforce. This
Peter Mišák, Head of Legal, ŠKODA Auto - Slovakia L: Please give our readers a bit of in- as we also had subjects dealing with law, I formation as to your background to get still somehow felt attracted to it and knew to know you better. that I would like to study law as well. As a result, I soon found myself studying two MP: The beginning of my career can be universities at the same time, which was traced back to my childhood. I was always very demanding, mainly because of the fact interested in law, because my mother used that universities were not around the same to work in court and I grew up surrounded place and I had to travel a lot as a result. by this environment. Although, I could not clearly imagine what this kind of job re- In the end, I successfully finished both of quires exactly it was very tempting for me. them and had to decide my future direction. It seemed to me that corporate law In secondary school I already started think- would be the right choice considering ing about my career path and there were my educational background. As a result, two fields that I found interesting: law and I started working in a leasing company economy. I decided to study economy, but where I got the opportunity to also work
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like any other young boy, cars fascinated me and I used to play with them all the time. This passion stayed with me until adulthood so when I got an opportunity to work for a company that produces cars, there was no doubt that I would take this chance. I have been working for the comL: Your current role is that of Head pany since 2005 and I still love it. I am also of Legal for Skoda. What does this role grateful that I got a chance to work a lot on entail for you? What are your main re- the distribution side of the business, expossponsibilities? ing me to more than just the legal matters related to the production of cars. PM: Well, as you have already mentioned, it is all about responsibility since the law- L: In 2012, Slovakia was the world’s yer exists to do right things and to make 22nd car producer (in terms of volume). right decisions. My main task is to oversee This is quite impressive for a country if the employees and the company itself this small. What do you think are the act in accordance to law. Nowadays I also main reasons for this? use more and more of my economics background, but the essential part of my work PM: I think that the main driver of the sucstill deals with legal issues. cess is actually the quality of the working force. Slovaks are persistent, flexible and “the main driver of the dedicated workers. Proof of their hard work are the cars produced here which success is actually the have a high level of quality - all this for a quality of the working reasonable working price. Foreign investors are aware of this fact, which is why force” investments are drawn towards to such a L: What takes up most of your time? small country as Slovakia. Let me also point What do you see as your biggest chal- to the newest statistics, which say that Slolenge? vakia is already on the first place concerning the production of cars per capita. PM: In this very moment, we face a big amount of cases and thus the main prob- A very good example is the VW factory, lem is to cope with all of them, as we do that produces not only high class vehicles not have so much time. We have to be able such as Porsche Cayenne, VW Touareg to prioritize carefully between everything but also our smallest vehicle, new to the we need and not fall behind with our tasks. ŠKODA family, the ŠKODA Citigo. The Our team is smaller than in the Czech Re- factory has been present in Slovakia for public, which adds to the pressure, but it 20 years and is very successful, reason for consists of members of a very high profes- which we can still see investments made sional level. towards its growth. This wouldn’t be possible without the qualified workers. Of course, when we need, we use external services and we cooperate with other law L: Do legislative bodies encourage the offices but even that requires my supervi- development of this industry? How so? sion, which takes time. PM: Yes, for sure. There are many opL: Why did you choose to work for the portunities where producers can invest. automotive industry and why did you Slovakia definitely has great conditions for choose Škoda specifically? investment and it attracts many investors. We do not know how it is going to be in the PM: It is simply related to the fact that, future, but at the moment, the conditions
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SLOVAKIA Cechova & Partners Advising a national automobile wholesaler and distributor Cechova & Partners has been assisting a national wholesaler and distributor of one of the largest automobile manufacturers on various competition and compliance matters and vertical distribution contracts with dealers and service providers.
Advising a Swedish leading manufacturer of heavy trucks and buses Cechova & Partners advised a Swedish company, one of the world’s leading manufacturers of heavy trucks and buses, on its recent reorganisation in Slovakia. The team provided legal assistance in the process of restructuring of real estate, reorganisation of businesses in Slovakia and also related corporate changes in its local subsidiaries.
Ružicka Csekes Advising the Ministry of Transport, Construction and Regional Development on motorway project Ružicka Csekes in association with members of CMS advised the Ministry of Transport, Construction and Regional Development on the preparation of a project outline for the D4/R7 PPP motorway project consisting of the bypass of Bratislava and the express road connecting the capital with south-eastern parts of its metropolitan area. The project is likely to be in the region of EUR 2 Billion in capital costs.
The Private Practice Strip
in the automotive sector. I found it very interesting mainly because I am a man and I was always leaning towards cars. Therefore when after two years I was offered to work for ŠKODA AUTO, I did not hesitate for a second.
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are perfect. Slovakia always knew how to persuade investors to entrust their business into the market. Regardless of the type of Government, there have always been conditions in place which encouraged the development of this industry.
wishing to protect the environment and to reduce their ecological footprint are satisfied. Hopefully, this trend will continue along with the further development of alternative fuel engines.
brand of car people could own further entrenching the brand in the market. Nowadays, there are a lot of competitors, but people still have a great deal of confidence in ŠKODA cars.
L: Skoda is currently number 1 in terms L: What do you foresee, if any, are the of market share in Slovakia. What do main legislative projects that will im- you believe where the main elements pact your business? contributing to its success? PM: As you can imagine, production rules are very important. What we can already see is a propagation of a growing trend in the EU - the so-called “green line” or “downsizing” trend, where, by decreasing the engine volume, we decrease emissions. Cars should be more environmentally friendly and the Government might step in stronger towards this end. Nowadays every model of ŠKODA can be bought in this green line version, so the customers
We still try to invest more and more money to keep up the highest technological standards. You can observe all these efforts on our last model of the ŠKODA Octavia, which has high technical standards, but is PM: ŠKODA has a long-standing in the still affordable for the middle class. People country as the number one market share appreciate value for money. owner. It is connected with the fact that it has the biggest dealer network and the Indeed, it is a serious commitment to susbiggest network of services. I would go so tain such a high market share - we have a far as to say that it is the fate of this brand, 22% market share, which is not common given the fact that we come from the same in EU countries, where market leaders one state, where the ŠKODA brand was, normally account for around 10% to 15%. and still is perceived as a home-made prod- These statistics express the number of uct and the people are proud to own the sold cars, which I am proud in believing is car produced in their country. Historically, mainly the result of the professional team in the communist time, it was the only of colleagues in Slovakia.
GCG’s Budaors General Counsel Coffee Club One of the GC Grapevine’s editors, Orsolya Endrefi will be hosting the forth edition of this exclusive gathering of top GCs in Hungary. In tune with our promise to create a GC community, these periodical meetings are meant to exchange ideas and best practices, discuss trends in the legal industry, and dissect recent regulatory developments. If you would like to learn more, please contact Orsolya Endrefi: +36 20 458 7544 orsolya.endrefi@legalisglobal.com
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Selale Orkide Serengil, Legal Affairs Manager, Borusan Otomotiv Companies - Turkey been working as the “Manager of the Legal Affairs” of Borusan Otomotiv Companies who is the importer of BMW, MINI, Land Rover and Aston Martin brands in the territory of Turkey. As you can seem throughout my career, I preferred to work as an in-house counsel. L: Prior to your role at Borusan Otomotiv you worked at Progelighting and Meteksan Sistem, what do you find to be the similarities between working in such companies specialized in turn-key projects to the exclusive BMW dealer in Turkey? L: First of all, let’s start with a bit of background information for our readers. Could you describe your career path leading up to your current role? SS: First of all, I would like to share my educational background with you: I graduated from Ankara University School of Law. I received a master degree from Bahcesehir University, Private Law and nowadays I am undertaking my PhD studies at Istanbul University on Environmental Law. I had ten years’ experience in the information technologies sector in Meteksan Sistem Co., the group of Bilkent Holding. In addition to the regular legal tasks, I was involved in many projects such as merger & acquisitions, spin-offs, corporate turnaround restructuring projects, IPOs, various energy projects including HEP Projects and due diligence issues in this company. The main activity of Meteksan Sistem revolved around public tenders & projects, such as the MERNIS Project, AFIS Project, and all similar major procurements within e-government projects. After Meteksan Sistem, I worked for another company, “ProgeLighting”. In 2011, I started to work for Borusan Otomotiv. I have been working in the Automotive Industry for a period of two years. I started to my carrier as a “Contracts Manager” and now I have
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SS: Actually, there are more differences rather than similarities between the companies. Progelighting and Meteksan Sistem were wholesalers and managing turn-key projects all over the world. In spite of a few customers, there were large-scale projects amounting to millions of Euros. In other words, when I started to work with Borusan Otomotiv, I have transferred from “B to B” to “B to C”. At the beginning, the dynamics of the retail sector were quite different to me such as the way of doing business and the volume of the daily legal work. I am now responsible for four companies, two of them Importer Companies, one of them is the Retail Company operating with its branches, and the other one is a “rent a car” company newly established.
L: How would you describe your current role for our readers (eg, responsibilities, size of team, structure)? SS: We are an in-house legal unit serving all automotive companies of the group and reporting to the CFO. My primary task is to manage the Legal Affairs Team.There are five people in our team and we are responsible for all legal matters of the Automotive Group, such as Corporate Governance, Compliance, Contracts, and Correspondences with dealers and authorized services network for each brand and these issues are mainly related with Commercial Law, Competition Law, IPR including Trademarks & Patents, Real Estate Law, Labor Law and etc. One of the most important roles of our team is the coordination of the law firms and Patent Bureaus for the outsourced legal proceedings of the Companies. We actually prefer to out-source the litigation works and some specific legal issues to the appointed law firms. L: What would you say it the most challenging part of your job? SS: Well, the business is very fast; on the other hand the nature of the legal practices is slow as it is known. For this reason, you have to set up a balance between business and legal issues in order to establish “a secure and successful work”. It is a basic rule in all industries that you have to see the “whole picture”. As an in-house legal professional, because of the speed of the business units, there is always a time-pressure on you and you deeply feel the risk of it. In order to eliminate the risk, you have to establish a legal structure. When you feel that your company has a considerable safety margin towards this risk, it is the most beautiful ‘picture’ for an in-house legal professional. You then take a deep breath, relax and do your business with pleasure.
All of the companies that I have worked for are corporate and in these companies the tasks have all the time an urgency and critical element to them. Moreover, because I like to be involved in legal issues, working for these four companies is very enjoyable and satisfactory to me. But, the most attractive thing for me is the fact that there are well-known brands in Borusan Otomotiv, which you can feel and you can touch. As an importer of BMW, Land Rover and Aston Martin brands, Borusan Otomotiv is a “colorful” company along with the well- L: You mentioned to us that competition known brands. is a big challenge in Turkey for your in-
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dustry. Why is that so? SS: Competition is indeed a very important issue in our market and also it is increasing day by day. In this competitive market, the prices and the variety of vehicles, the quality of sales and after-sales services have a great importance. Particularly, in the premium segment, sales are determined by customer preferences. As a result of this, factors like product development, the model creation and styling are becoming more important.
Moreover, in such a market, “Customer Satisfaction” is the most important issue in terms of existing and potential customers considering the long economic life-cycle of our products. For customer’s satisfaction - in order to make a “difference” in this competitive market - it is really necessary to have the large product range demanded by the market. At the same time, you need to ensure that the quality of the products are complemented by the quality of your sales function and after-sales services.
L: If you could give one advice to a freshly appointed General Counsel, what would it be?
SS: Well, my first advice to the newly appointed General Counsel is: be close to the “business”. After that - once you truly SS: Well, recently there is some news re- understand your company and its needs, garding this “Automotive Legislation”. make sure you set up a well-equipped legal However, there is no “Draft Code” released team including external partners. or declared by the authorities yet. For this reason it is really early to talk about it. SLOVAKIA When we get the Draft Code and have a chance to review its provisions, then it will be possible to comment on it in detail. As a Ružicka Csekes matter of fact, this kind of a code presumably regulates all the activities in our sector, thereby this code may be a significant Advising on steel producer interest step for the industry. sale L: At the same time, new legislation will impose limitations on importing a car. Ružicka Csekes in association with members What are these limitations and how of CMS is advising U.S. Steel, the internawill they affect your business? tional steel giant, on the sale of its interest in the leading Slovak steel producer which is
SS: As I mentioned before, we don’t have one of the largest employers in the Slovakia. the Draft Code yet, so we don’t know what is going to be the limitations of the vehicle importation. In our company, Borusan, our main business is “importing vehicles”. For sure our business is going to be affected by UKRAINE the new regulation.
However, we believe that the rules concerning the importation will be positive for the importers who conduct their business in a professional manner. As it is known, during the last ten years, lots of L: With a slower growing Turkish econ- new legislations are entered into force in omy, how do you see the automotive in- our country and companies have simply dustry’s future in the country? adapted to them. Eventually, each legislation has a separate implementation process SS: In Turkey, just like all over the world, and requires a time for companies to adapt. the automotive industry is one of the most important and growing sectors. It brings The new Turkish Commercial Code is such an important amount of income to the na- an example which recently came into force tional economy. If the relevant authorities in 2012 and which regulates the entire will take the necessary policies and meas- commercial activities and the corporate ures (such as balancing the tax burdens), life in the country. We are very sure that as it will likely continue to contribute to our Borusan Otomotiv, we can easily adapt to national economy in the short-term pe- the new rules of the Automotive Legislariod. tion whenever they are taken.
Gide Loyrette Nouel
The Private Practice Strip
In this manner, “creating high performance at low engine” is the most popular solution considering the tax policy of the country. The R&D expenditures go up as a result and a large part of these expenditures are spent on “safety, comfort, lightness and fuel economy” in line with the needs of customers. Expenditures in this direction raise our costs and reduce our profit margins along with the tax burdens on the vehicles.
L: A new legislation will likely be enacted in Turkey according to which car manufactures may only produce cars in Turkey if they get permission from the government. How do you think that this will influence the national car market?
Acquisition of retail networks in Eastern Europe by the world’s leading retail operator Auchan Group GLN services in Ukraine in the acquisition are comprised of due diligence of the targets, structuring of the transaction, advice on real estate and competition matters, as well as obtaining a merger approval from the Antimonopoly Committee of Ukraine.
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HR Corner Josﾃｩ ﾃ］gel Gutiﾃｩrrez, HR Director, Daimler - Mexico Who better to hire a General Counsel than one who has been in the same shoes? While interviewing Ms Barreiro, the GCG editorial team learned that the current HR Director was the previous holder of the GC role within Daimler Mexico. It was the perfect opportunity to ask the HR function (who used to wear a GC hat) how they see the role of a GC within a company and what they look for when hiring one.
L: First of all, tell us a bit about yourself and your background. JG: I am a Mexican-licensed lawyer with an LL.M. from the University of Pennsylvania in the US. Prior to the Human Resources responsibility for Daimler Trucks Mexico, I’ve held both private practice and in-house positions more in the transactional arena. L: Prior to taking on the role of Human Resources Director, you worked at the General Counsel within the same company. Why did you decide to switch to the HR function? JG: That is right. My decision came as a result of an interest to grow in Daimler Trucks and the Human Resources position meant a leadership position and opened a career path for me within the senior management of the company. L: How does, if at all, your legal training help you in your current role? JG: To a great extent. Particularly in labor and collective bargaining matters. In addition, my legal training has been extremely useful in adapting recruiting practices and policies pursuant to Mexico’s new legislation on data protection as well as the recent federal labor law amendments addressing non-discrimination, harassment and mobbing. L: What did you find to be the most challenging aspect of switching functions? JG: For sure the most challenging part was digesting that I was no longer the go-to person when it comes to legal matters. I have to admit that in many instances I had to almost bite my tongue to avoid asking the question that would necessarily render a legal answer or to provide advice from the legal stand point whether at a board meeting or at a staff or internal client meeting. L: In our conversation prior to this interview you mentioned that your first big project in the new function was to find a new General Counsel. How did you go about sourcing candidates to replace you? JG: In the case of Daimler Trucks Mexico we had a very strong internal candidate that eventually took over my old job. However, she did compete against external candidates, which we sorted from a job posting that we did on LinkedIn as well as some Mexico local job searching websites. L: What did you look for when hiring a new General Counsel? JG: As with any other senior management position, in this case my assignment was to find the person that best met the job description, particularly with respect to the main competencies described for a big job like that.
Basically we were looking for a talented leader that was results-oriented, strategic yet payed attention to details. Needless to say that any candidate would be expected to have excellent presentation skills in both the Spanish and the English languages and be a lawyer licensed in Mexico and preferably with post graduate training. L: Did you tend to look more at his/her hard-skills and knowledge or soft skills? Do you prefer to hire lawyers that are specialized in the automotive sector? JG: As you can reckon from my answer to the previous question, we were looking for a balance on legal knowledge and experience yet the leadership behaviors played and important part as these behaviors are the back bone of Daimler Truck Mexico’s culture. We did not make a particular emphasis on prior specialty in the automotive sector. L: Was this recruitment different from any other legal roles you hired for within the company? How so? JG: Absolutely, based on the nature of the job as a leadership position and the importance to develop the direct reports that are under the GC. It represented a far more nuanced search for the right person as the number of traits, knowledge, and skills we had to find in one person made it quite a challenge. L: How do you coordinate with the current General Counsel when it comes to hiring legal personnel? JG: We provide advice in coining the job descriptions based on the needed competencies of the position at stake, source qualified candidates and support the recruiting process with competency-based interviews and assessments if required. We can also offer the support of an executive search firm if the nature of the position that is being sought so requires. L: As part of your daily operations, you must come across a wide range of labor law issues. Do you defer to your legal colleagues on such matters or do you prefer to employ your own legal expertise? Why? JG: This is a very good question. It really depends on the nature of the labor issue. Generally, all litigation or threatened litigation or labor-related contingencies are reserved to the legal department not only because they are within their area of responsibility but also because they are the best qualified to determine the scope and size of a provision if any. For other legal issues, whether individual or collective in nature, I can make decisions within the scope of my responsibilities and usually take advantage of my legal background.
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Please, just talk to me!
By Luciana Gualda - Legal Affairs Director - Ache Laboratorios - Brazil makes me complain: their own interaction with my headquarters.
Gide Loyrette Nouel Advising on Société Générale subsidiaries sale GLN is advising Société Générale, a major foreign banking group, on the sale of its two subsidiaries in Ukraine comprising of a series of transactions connected with the sale of the entire retail loan business of Société Générale in Ukraine, including both assets and share deals.
I have seen some Brazilian firms pitching our headquarters to offer services that the local GC (myself!) didn’t even know were necessary. I also have been in situations where I had to explain why have I not ‘talked of these before’. These could mean bad news to which I was still trying to find a solution before reporting or good ones Advising on Astarta financing My path to becoming a General Counsel that I was putting the whole local team on started when I was a legal trainee in a Ger- the same page before the outer communiGLN is advising the International Finance man chemical company so long ago that I cation. Corporation on a USD 50 Million loan to refuse to identify it. Astarta, a Ukrainian agro-industrial holding, It could be just a matter of pro-activity but, granted for the construction of a soybean Being part of the Latin American intellec- at the end, it seemed as if the firms were crushing and biogas facility, the expansion tual property team, I had the opportunity going out of their way to give the impresof agricultural land, and the purchase of to interact with law firms from all over the sion that outside counsels have the capacinfrastructure to increase production and region and I found it remarkably interest- ity of being much faster than the in-house modernise sugar production. The loan was ing - from paying attention to the differ- ones, with the purpose of appearing effisecured by pledge over various movable and ent time zones for conference calls to the cient enough to have a safe-conduct for the immovable assets. grace of sometimes communicating with whole company. my colleagues in my family language (all from Spain), instead of the democratically Of course this is the exception and not the Advising GMP Securities Europe on automatic English. rule. Most of my outside colleagues were always too elegant to deliberately by-pass public offering At that time, I had no idea that one day I any GC. The intention here is to call some would face a slight, but tricky to kill, head- attention to what may happen under spe- GLN is advising GMP Securities Europe, a ache due to the very same global and easy cific circumstances when a law firm deems Canadian independent investment dealer, in communication. it more efficient towards their goals to connection with a full public offering of its communicate directly with ‘Corporate’. I common stock, listed on the TSX Venture Now that I have a GC badge, when work- would generally advise that such approach- Exchange (Canada) by Cub Energy Inc., a ing for a multinational company I have to es should be avoided for the sake of those Ukraine-focused upstream oil and gas comdeal with our corporate headquarters, who, like me, already have enough to deal pany, for aggregate gross proceeds of USD with the international law firms, and, in with without the potential disruptions this 15 Million. addition to that, with the Brazilian based might create. global law firms, which do render us impeccable work. There is one thing that
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The Private Practice Strip
At this point this may seem a bit of ‘jealousy’ so I will try to explain that it is not the case. Such direct communication may make our daily load a little lighter. It can also help us with budget issues, considering that some of the locally incurred fees may be shared with a merciful boss out there. However, some of my experiences were not exactly good.
UKRAINE
Ed 1 Vol 3 2013
Competition and the connected car: Which road ahead?
By Dr.Thomas Funke (Partner) - Osborne Clarke - Cologne and Brussels
Cars have long become computers on wheels. Airbags, stability systems and fuelefficient transmissions all run on bits and bytes. While these electronic systems ensure a comfortable ride and crash safety, they also add to the complexity of repair and servicing. The right of independent repair shops to connect to the electronic onboard systems is essential for their ability to provide accurate service, and to compete in a market often dominated by the vehicle manufacturer’s service network. Access to data will become even more important as cars are equipped to transfer information via GSM interfaces. More and more vehicles are “connected cars”, which regularly send information about their location and status to the vehicle manufacturer’s data centre. In the event of a crash or breakdown, this technology can ensure that help reaches the motorist faster than ever. BMW even advertises remote repair services, where electronic troubles are diagnosed and resolved without even taking the vehicle to a garage. These advances could give the vehicle manufacturer even greater market power in the profitable parts and servicing market: Someone who is able to predict that a new set of brake pads will be needed in four weeks’ time
can contact the customer and order the and to allow the public emergency services right spare parts earlier than any competi- to establish a voice communication with tor. the passengers to enquire whether help is needed. Unless there is a response that no In-vehicle data and knowledge about driv- assistance is required, an ambulance will be ing patterns is also of significant value to sent to the site of the crash. This system is motor insurers. In the UK, Germany, Italy, expected to save some 2,500 lives in the Spain and other EU member states, several EU each year. insurers offer discounts to drivers willing to be tracked and showing low risk pro- The eCall system will be based on a GPS files. Using telemetry data to profile in- positioning device and a SIM card for wiredividual drivers is of greater interest now less communication. Components of this that EU motor insurers are no longer al- type could also be used for more far-reachlowed to discriminate on the basis of the ing telematics services, which might disdriver’s sex. ‘Drive like a girl - even if you tort competition in the markets for repair, are a boy - and you will get a discount’, a insurance or in-car entertainment. While popular ad for telematics-based motor in- some vehicle manufacturers have signalled surance in the UK reads. support for an open platform, others seem to prefer a closed-shop approach. The legal implications are significant. Most obviously, the use of telematics to The EU competition law framework for the track driving patterns or the location of motor vehicle sector highlights that all inthe vehicle requires the consent of the ve- formation ultimately needed for servicing hicle owner as privacy is paramount Data or repair should be available to all repairprotection issues become more complex ers, providers of roadside assistance, parts where the driver is not the owner of the suppliers, manufacturers of diagnostic car, and fleet operators need to consider equipment and other independent operaemployment law ramifications as well. tors in the market. The EU type approval regulations specify that remote diagnostics But will vehicle owners have a choice as to information, parts identification data, fault where their data is sent? Will they be able codes, and electronic service manuals are to download music or apps to their car among the data that the vehicle assembler from the provider of their choice, or will is obliged to share. The EU block exempthe vehicle manufacturer become a gate- tion guidelines and a recent sector report keeper for telematics-based services? published by the French competition authority emphasize that non-discriminatory The European Parliament has confirmed access is to preserve aftermarket compethat consumer choice and open access are tition. This principle should be applied to paramount, and representatives of the EU protect competition and consumer choice Commission have expressed support for in the age of the connected car. these principles. It is yet unclear though to which extent these safeguards will be re- Data already drives key technology marflected in the EU framework for “eCall”, an kets. The automotive sector will likely folautomated emergency call system which low this trend. According to studies, the legislators would like to see built into all European telematics market will grow to vehicles newly type-approved as of 2015. EUR 5 Billion by 2018. As the connected This system will only serve to send a mini- car becomes a mass phenomenon, access to mum set of data to a public service answer- in-vehicle data will become an even more ing point in the event of a serious crash, important key to market success.
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Ed 1 Vol 3 2013
Mexico’s auto-part industry: The application of the new amendments to the Federal Labor Law for outsourcing employment schemes By Rodrigo Rojas Robleda (Partner) and María Elena de la Fuente (Associate) - González Calvillo - Mexico
“In terms of internal consumption and volume of exports, the automotive industry is the most important export-oriented industry in the country.” The Mexican Auto-Part Industry The automotive industry is a strategic commercial activity in Mexico. In terms of internal consumption and volume of exports, the automotive industry is the most important export-oriented industry in the country. Mexico is the principal supplier of auto-parts for the US. Moreover, in the context of the current Mexican economic and legal environment, and considering Mexico’s privileged geographical position, low manufacturing costs, qualified work-
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force and key governmental incentives, engage employees in their own name but the Mexican auto-part sector is certainly for the benefit of the auto-part business. poised to grow substantially. These popular schemes were made with In this context, international auto-parts the intention of mitigating the effects of producers are making major investments the statutory requirement for companies in Mexico. Currently, more than 1,100 in Mexico (including auto-part companies) auto-parts manufacturing companies oper- under the FLL - which mandates employate in Mexico, representing an important ers to share profits with their employees source of direct and indirect employment. (10% of the net taxable profits of the relevant employer for the applicable fiscal The auto-part industry is subject to mul- year) - by (i) isolating the assets of the busitiple laws and regulations. Among these, ness from labor contingencies; and (ii) althe Mexican Federal Labor Law (FLL), locating the employees to outsourcing vethe country-wide statute that governs the hicles which, through services agreements individual and collective employment rela- with the operating companies, are able to tions in Mexico, is a key body of law that control profits that are to be considered for applies generally to employers, including employee profit sharing. auto-part companies, and that is of material importance for the manner in which auto-part companies, especially those established in Mexico by foreign auto-part makers, set-up and operate shop in Mexico.
“By using these outsourcing schemes, it is widely agreed that the profit-sharing Historic Employment Schemes: and other direct labor Outsourcing risks were importantHistorically, most of the auto-part compa- ly diminished.” nies in Mexico engaged employees either through directly controlled outsourcing schemes (i.e. one or more entities legally separated from their operating entities but controlled by the same corporate group), through engagement of an independent third-party outsourcing agency, or in the case of auto-part companies benefiting from maquila (IMMEX) programs - temporary import for assembly and transformation programs offering customs and tax benefits - through “shelter” operators who
By using these outsourcing schemes, it is widely agreed that the profit-sharing and other direct labor risks were importantly diminished.
Recent Amendment to the Mexican Federal Labor Law On December 2012, relevant structural and material amendments to the FLL became
Ed 1 Vol 3 2013
evant workplace; (b) the outsourced work must be justified by its specialized character; and (c) the outsourced work cannot comprehend equal or similar activities to those performed by other employees providing services at the contracting party’s workplace.
“The general consensus within the Mexican labor law community is that this reform is unclear at best and it raises more ques“These amendments tions than answers” have been the most substantial revision made to the FLL since 1970”
If any outsourcing scheme used by a Mexican business does not fulfill these requirements, the final beneficiary of the services rendered by outsourced personnel, that is, the entity or entities operating the business and engaging the outsourcing, will be deemed direct employer and responsible for the compliance of the employment obligations towards the employees, including, among others, profit sharing obligations, situation which would obviously substantially affect the mitigation benefits that the historic employment schemes explained before granted.
effective. These amendments have been the most substantial revision made to the FLL since 1970, and are a direct consequence of 2012’s fundamental amendment to the Mexican Constitution with regards to the protection of human rights, which were made under the basic premises of ensuring that every labor authority guarantees the observance and protection of human rights for employees, and updating the employment relations in Mexico in accordance with the ever-changing labor market. The general consensus within the Mexican labor law community is that this reform is From a business and operational perspec- unclear at best and it raises more questions tive, the amendment to the Mexican Fed- than answers, but also that it is to be taken eral Labor Law regarding the outsourcing very seriously and on a case by case basis, as hiring scheme results the most relevant, in its potential impact in the manner in which particular to auto-part operations. businesses operate in Mexico and related costs can be substantial, particularly (but Among other important changes (i.e. new not only) in terms of profit sharing obligaoptions and rules for individual employee tions. engagement), the amendment sets forth that, for anyone who intends to outsource Because of the very recent application of work, the following conditions shall be this amendment, there are no court precmet: (a) the outsourced work cannot en- edents or rulings, or labor authority intercompass the totality of the activities, simi- pretations, offering more light regarding lar or alike, that are performed in the rel- the specific application of this amendment
or that would clarify its extent and coverage.
The FLL Amendment: Concerns for the Auto-Part Industry Specifically within the auto-part industry businesses operating in Mexico, given all of the factors described above and the fact that many of them do currently use one of the historic outsourcing schemes previously explained, the reaction to the FLL amendment that the authors have noted is that while the general attitude towards this amendment has been one of “wait and see”, the concern of the eventual application of these amendments to their specific businesses have led to many auto-part businesses performing a detailed legal and operational review of their current employee outsourcing schemes, with the intention of finding potential routes to comply with the requirements contained in the amendment and, ultimately, mitigating to the best possible extent the effects and costs of the amendment. Even with these changes, it is a common understanding that Mexico does clearly offer competitive advantages over many other jurisdictions, so players in the auto-part industry are keen to update their employment schemes and continue their business in Mexico.
“Even with these changes, it is a common understanding that Mexico does clearly offer competitive advantages over many other jurisdictions, so players in the auto-part industry are keen to update their employment schemes and continue their business in Mexico.”
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Ed 1 Vol 3 2013
Is sustaining the automotive industry a government priority?
By Alin Chitu (Tax Partner) - Tuca Zbârcea & Asociatii Tax - Romania It is common knowledge that the growth of the automotive industry is dependent on policymakers’ decisions. Facing a difficult car market (all mass producers posting negative growth in recent years) with no appetite for expanding production facilities, plus fierce competition between countries in attracting top-tier producers and the constraints accepted upon EU accession, Romanian Governments have not had much ground to provide a very encouraging package for a potential investor.
Historically, the Romanian automotive industry has its roots in the early 1900s. The industry has developed on western pillars since its beginnings. The first notable joint venture was concluded around 1935, when Ford started to assemble vehicles in Romania. During the communist era, Romania was one of the largest producers in the region. This was due to developments based mainly on collaborations with Renault (for Dacia vehicles), Citroen (for Oltcit vehicles), and Man (for heavy trucks) etc. These collaborations were brought about by Government’s efforts to develop the horizontal related industry (with certain tax and employment benefits). Also, from a financial perspective, exports generated a major capital influx, which helped the trade balance.
“certain measures [..] may be seen as an incentive for the local In order to unfreeze the local market, in November 2012 the authorities unblocked producer” the acquisition of vehicles by the public sec-
However, over the past twelve months certain measures taken by the authorities may be seen as an incentive for the local producer. It is debatable whether these actions are part of a greater plan the politicians have to develop the automotive industry, but even if they do not constitute a real incentive, the overall consequences seem like a breath of fresh air for the local industry. The first one is the introduction of an environmental stamp tax on vehicles (Emergency Ordinance No. 9/2013). This comes in a raft of measures introduced with the purpose of taxing pollution related to vehicles. In comparison with the former tax paid upon the registration of a vehicle, the new framework reduces the tax burden on new vehicles and creates a higher burden on Euro 4 and Euro 3 (older models). This means that acquiring a new vehicle may be preferable to buying one that is three-four years old.
Although part of the automotive industry vanished during the post-communist era, two major producers have been privatized successfully - in that they continue to produce vehicles more or less successfully (i.e. Dacia and Ford which continue production A second decision (which at first glance at facilities formerly belonging to Daewoo does not give producers any advantage) and Oltcit, respectively). is the introduction of limitations on the
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tax depreciation expenses related to vehicles. Before February 2013, there was no value limitation on the tax depreciation recorded by legal entities. In February, any depreciation expense related to vehicles with acquisition values above EUR 16,000 (if depreciated over four years) or above EUR 24,000 (if depreciated over six years) became nondeductible for Romanian corporate tax purposes. These thresholds are slightly above the most expensive model manufactured by local producers. Thus, one may conclude that they are at an advantage over premium car producers when a company decides to acquire a fleet.
tor, after a three-year period of restriction. However, certain limitations were imposed (e.g. engine capacity limited to 1,600 cm3 and value limited to EUR 18,000 including VAT). As the models made by local producers meet both criteria, again they are at an advantage over premium car producers. To conclude, the three aforementioned measures seem to be supportive towards the development of the local automotive industry. On the other hand, as local consumers generally prefer to buy secondhand vehicles from Western Europe, due to both low incomes and high financing costs, the local market cannot be seen as a major point of interest for producers. Secondly, very poor infrastructure, the relatively long distance to dealer networks and outlets and basically no tax incentives available do not make Romania a very good relocation destination.The Romanian Government should therefore seek to solve these matters before targeting major players in the industry.
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Ed 1 Vol 3 2013
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Ed 1 Vol 3 2013
European block exemptions in the automotive industry By Mgr. Michal Kohn (Advocate) - Ružicka Csekes - Slovakia vided a company has complied with the rules contained in such block exemptions, the contract that a company has concluded is not considered prohibited, although it could be considered as such under normal circumstances. A block exemption creates a safe harbour that guarantees that agreements that businesses have executed are not considered agreements restricting competition.
The distribution system of new motor vehicles and its aftermarket (i.e. repair and supply of spare parts) operates on the basis of commercial and service contracts entered into between importers and members of their distribution or service networks. New members can become part of an importer’s network based on qualitative selection (when the importer accepts each candidate that fulfils certain objective quality criteria) or quantitative selection (when the quantitative criteria directly limit the number of distributors or repair shops, for instance by setting a maximum number of distributors or repair shops). When drafting the contractual provisions and choosing either qualitative or quantitative criteria, it should be borne in mind that such practices must not constitute an anti-competitive agreement (i.e. an agreement that distorts or may distort competition). Anti-competitive agreements are prohibited both under Slovak law (Section 4 et seq. of Act 136/2001 Coll. on the protection of competition) and European law (Article 101 of the Treaty on the Functioning of the European Union), and may incur penalties amounting to 10% of a company’s annual turnover. To simplify the assessment of whether certain provisions of commercial or service contracts may constitute a prohibited agreement, European law provides block exemptions from the anti-competitive agreements prohibition. Pro-
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330/2010. In cases where commercial contracts or the manner of choosing business partners, either through qualitative or quantitative distribution criteria, have not been harmonised with Regulation (EC) No. 330/2010, this should be done as soon as possible.
No transition period has been provided to the aftermarket with respect to the new block exemptions in Regulation (EC) No. 330/2010 Currently, there are three block exemptions and 461/2010 - i.e. the aftermarket must be applicable to the auto industry. As of June 1, in accordance with these regulations as of June 2013, the exemptions will be downsized and 1, 2013. their application unified. The new block exemptions alter the market The conditions of the block exemption for share threshold for importers to benefit from car sales and its aftermarket were previously the block exemption. Regulation (EC) No. provided in Regulation (EC) No. 1400/2002. 1400/2002 provided several market share These conditions shaped the commercial and thresholds allowing exemptions for importers, service contracts used by importers. Having depending on whether the importer used qualibeen a special block exemption in the auto in- tative (exemption application not restricted by dustry, Regulation (EC) No. 1400/2002 was any market share threshold) or quantitative criabolished in 2010, and superseded by the gen- teria (exemption applicable only if the market eral block exemption in Regulation (EC) No. share did not exceed 40%) to select its part330/2010. In addition to general conditions, ners. this block exemption contains specific competition restrictions to which the exemption does Regulation (EC) No. 330/2010 does not pronot apply, or which cause the exemption to be vide any specific market share thresholds for withdrawn. selection of business partners based on qualitative or quantitative criteria, but instead proAccording to the European Commission, com- vides that the block exemption can apply to petition in the aftermarket suffers less exposure the primary market and the aftermarket only than the sales of new vehicles, where competi- if the market share of each party to the agreetion is more intense. With regards to that, the ment does not exceed 30% in any of the relEC adopted another “stricter” block exemption evant markets affected by the agreement. It is in the form of Regulation (EC) No. 461/2010, therefore necessary to check the current marwhich introduces further restrictions that the ket shares, and, based on that, decide on the parties must incorporate into their contracts, partner selection criteria (compared to quantisubject to complying with the conditions under tative selection, the qualitative requirement has Regulation (EC) No. 330/2010. significantly lower anti-competitive potential, even if the 30% market share is exceeded). To accommodate the recent rules regulating the selling of new cars, the European Commission If a block exemption does not apply to an agreeprovided a three-year transition period ending ment, it does not automatically mean that the May 31, 2013. During this period, car sales are agreement is prohibited. Nevertheless, parties governed by Regulation (EC) No. 1400/2002, forfeit the safe harbour offered by the exempwhich has since been abolished. After June 1, tion and must consider each agreement sepa2013, sales of new cars will have to follow the rately to identify whether it is anti-competitive block exemption under Regulation (EC) No. and prohibited.
Ed 1 Vol 3 2013
Next Edition’s Focus -Tax-
In the next issue “On the GC Grapevine” will focus on tax. Here are some ways you can get involved: The Grapevine pick: Recommend a general counsel to be featured as the “Grapevine pick” (My) Word on the Grapevine: Reply, provide feedback and comments either to an article or to the “GC Grapevine” overall an we will publish them under the “(My) Word on the Grapevine” section Write to us at radu.cotarcea@gcgrapevine.com to with regards to either one of the two or simply to tell us how we could make this publication better. We are always happy to hear from our readers.
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We would like to thank those who contributed to this newsletter: Joaquim Ferraz-Martins
Luciana Gualda
Wolfgang Lehr
Dr. Thomas Funke
Dr. Laura Háray-Takács
Rodrigo Rojas
Marcela Barreiro
María Elena
Peter Mišák
Alin Chitu
Selale Orkide Serengil
Mgr. Michal Kohn
Ángel Gutiérrez
If you would like to subscribe to the GC Grapevine please register at www.gcgrapevine.com The Editors Orsolya Endrefi Associate Director M +36 20 916 2252 @ orsolya.endrefi@legalisglobal.com David Stuckey Commercial Director M +36 20 806 2252 @ david.stuckey@legalisglobal.com Radu Cotarcea Marketing and Operations Director M +36 20 969 6410 @ radu.cotarcea@legalisglobal.com
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