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Business

IG Metall Strikes Cripple German Car Production

Large chunks of Germany’s proud auto industry were paralyzed Monday, as strikes in the eastern part of the country meant plants in the west could not continue production. BMW told some 10,000 autoworkers to stay at home.

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Strikes by metal workers in eastern Germany are affecting production of carmaker Volkswagen.

Engineering trade union IG Metall has been fighting to cut working hours in eastern Germany from 38 to 35 hours a week, bringing practices in line with those in western Germany. The union says the difference creates a “fairness gap”, but employers contend shortening the eastern week to match the west would endanger thousands of jobs in the former communist east.

As the strikes entered their fourth week, some western car plants on Monday were forced to halt assembly lines as eastern parts makers failed to make key deliveries. BMW closed its 3-series production lines in Regensburg and Munich plants indefinitely, affecting 10,000 western workers.

A spokesman for Germany’s largest automaker Volkswagen said on Monday if the eastern strikes continued, the company would likely have to halt production of some models at its flagship plant in Wolfsburg this Friday.

IG Metall’s designated chairman Jürgen Peters on Monday said the union was willing to compromise on the implementation of the shorter work week, so long as employers would return to the negotiating table.

“We always said it wouldn’t have to happen overnight. We want it to happen in steps that takes into account the differences of each company,” Peters told Deutschlandfunk radio.

IG Metall, which represents 310,000 auto, metal and engineering workers nationwide, has already reached agreement with eastern German steel companies for cutting the work week down to 35 hours over several years. But around 9,000 metal workers remain on the picket lines in the eastern states of Saxony, Brandenburg and Berlin.

Fears of damage to the economy

The industry and some economists fear the strikes could damage the already weak east, where unemployment, currently around 18 percent, is double that of western Germany. They contend that eastern productivity still lags behind the west and that companies will be less likely to invest in eastern Germany if the week is shortened, since wage costs will increase.

“It has a negative effect in a massive way on the east German labor market,” Wolfgang Wiegard, an economic advisor to the government, told ZDF television. “This strike is at the end of the day a strike for more unemployment in eastern Germany.”

Some experts believe if the union is successful in cutting eastern working hours, many companies will choose to move production jobs to neighboring low wage countries, such as Poland and the Czech Republic, that will join the European Union next year.

IG Metall Streikposten in Ostdeutschland

With the lost production costing BMW an estimated €38 million ($44 million) per day, the company has said it may rethink its planned investment in eastern Germany. BMW is currently building a plant in Saxony near Leipzig that, when completed, will employ around 5,000 people.

IG Metall has given employers an ultimatum to return to the negotiating table by Wednesday, or the union will expand the strikes to other plants. Over the weekend, German Chancellor Gerhard Schröder appealed to both sides to come together. “It would be better if there were an agreement an hour too soon instead of an hour too late. I’m counting on both sides to be reasonable and end this as soon as possible,” he said.

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