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Business

A Repeat Performance at VW?

In a scene that has become typical of the German car industry over the past months, Volkswagen workers downed their tools Friday after management refused to budge on wage increases.

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VW workers protests: Are more strikes next?

The location might have been different, but the intent was the same. In Hannover, some 4,000 employees at Europe's largest carmaker stopped work for about an hour overnight to send a signal to the company's managers: we will fight for our jobs.

Just a few weeks ago, workers at the Opel plant in Bochum walked away from the assembly line in a desperate attempt to save jobs that had come under the chopping ax of the American parent company, General Motors.

Is Germany facing a repeat of the Opel strikes in the coming weeks, this time at one of the country's biggest employers?

Representatives of the powerful IG Metall labor union said late Thursday they would call for a series of warning strikes at Volkswagen starting Friday -- a week earlier than planned -- if demands for a salary increase are not met.

A warning signal

After the fifth round of wage talks broke off Thursday in a deadlock, some 1,000 night-shift workers at VW's plants in Hanover, Kassel and Brunswick laid down their tools at midnight, bringing production to a complete standstill for an hour, a spokesman for IG Metall said.

The high participation rate "shows that the workforce is fully
aware of the seriousness of the situation," the spokesman said. "It shows people are not prepared to pay the high price demanded by management."

Earlier in the week about 30,000 VW employees across the country stopped work for two hours. Union leaders said at the time that it was intended as a "warning shot" in what will continue to be tense negotiations between the carmaker and its workers. More warning strikes were planned to run into the early part of November.

Under pressure

After reporting less than ideal third-quarter results on Thursday, the Wolfsburg-based company said it remained commited to saving €2 billion ($2.5 billion) in wage costs until 2011. Company negotiators have been asking for a two-year wage freeze for 103,000 workers in six VW plants in Germany. Union leaders have been pushing for a four percent pay increases over the next four years and job guarantees for the next 10 years.

On Thursday, negotiations broke off in a standstill when the deadline expired for both VW's current wage agreement and the so-called "Friedenspflicht" deadline banning industrial action during wage negotiations. Management and union representatives were scheduled to return to the negotiating table on Monday.

Different companies, same problem

If this sounds familiar, it's because it is. The weak dollar and tough US market has hit German carmakers hard. Opel, VW and Mercedes Benz have all reported sinking sales in their biggest market and are looking of ways to stanch the bleeding.

Mercedes-Benz cut a deal with workers in their flagship Stuttgart plant in July which they say saved 6,000 jobs and put them on the company on its way to a €500 million savings plan.

When Opel, owned by US company General Motors, talked about shutting down plants in the German cities of Bochum

Aktionstag: Opel Arbeiter demonstrieren vor dem Werk in Rüsselsheim, Plakat: Streik Hilft

Opel strikers in Rüsselsheim

and Rüsselsheim earlier than planned, tens of thousands of workers went on a week-long strike. They blamed bad managerial decisions in America as the cause for Opel's European woes.

VW workers are singing the same tune and have warned of a repeat performance of the Opel walkout.

"Wrong decisions and management errors have put us in the position we're in," said Klaus Volkert, head of the general works council . "People who steer a car into the ditch shouldn't criticise the driving ability of others," he said.

Volkert said "it's now up to management whether we reach a compromise or head towards a conflict."

Management optimistic

On Thursday, the agreement which guards against action on any side runs out as does the current labor agreement. Volkswagen Personnel Chief Peter Hartz angered union bosses earlier this month when he warned that the company would have to cut jobs if the union didn't approve the savings plan.

In the Thursday edition of the Braunschweiger Zeitung he struck a more conciliatory note.

"We need to find a solution that doesn't take money out of people's pockets but that still sinks labor costs," Hartz told the newspaper.

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