Restructuring Talks Underway at Opel and Volkswagen | Business| Economy and finance news from a German perspective | DW | 21.10.2004
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Restructuring Talks Underway at Opel and Volkswagen

Crucial restructuring talks at German carmakers Volkswagen and Opel resumed Thursday as management and unions of both companies attempted to hammer out the details of painful but necessary cost-cutting measures.


German autoworkers are worried about job security

After nearly a week of strikes at Opel plants, workers agreed to return to the assembly line on Thursday, while negotiations carried on behind close doors between union representatives and the management of the German branch of US auto giant General Motors. At the same time, talks between the management of VW, Europe's biggest carmaker, and the powerful IG Metall labor union entered their fourth round in Hanover, northern Germany, after a week-long break.

VW is seeking a two-year wage freeze for the 103,000 staff at its German production sites and a 30 percent reduction in labor costs by 2011. For their part, unions are demanding job guarantees for 10 years plus a four percent increase in wages.

The clock is ticking

Time is running out for both sides -- VW's current wage agreement expires on Oct. 28, as does the so-called "Friedenspflicht" deadline banning industrial action during wage negotiations.

IG Metall has said it would call for warning strikes if no progress were made by next week. "If no outcome is reached by Oct. 28, VW will face warning strikes in early November," said the union's chief negotiator Harmut Meine.

Possibilities for compromise

The union was prepared to explore possibilities for compromise in management's cost-cutting plans. But that was not a blank check for management to make demands that were unacceptable, Meine said.

Some progress appeared to have been made at the end of a third round of negotiations last week. Management indicated it was ready to provide job guarantees -- the main demand of the IG Metall labor union -- in return for concessions on the part of workforce.

IG Metall described the development as a "small step in the right direction" but key issues still needed to be resolved. And VW's chief negotiator, Josef-Fidelis Senn, also said that the two sides were still "a long way apart" on many details.

Looking for a way out of crisis

Streik bei Opel in Bochum

Workers of a late shift gather in Bochum for a spontaneous work stoppage after General Motors announced it would have to cut up to 10,000 jobs in Germany

At Opel, General Motors management and employee representatives met in Rüsselsheim, near Frankfurt, to discuss ways out of the carmaker's current crisis, following the decision by Opel workers to return to work after several days of walkouts.

Top of the agenda were GM's plans to axe thousands of jobs in Europe and in Germany in particular. The negotiations were expected to last weeks as management and unions hammered out ways of keeping redundancies to a minimum and sought solutions to maintain Opel's German manufacturing base in the long term.

Workers at the car maker's Bochum factory, seen as one of the main targets of GM's draconian cost-cutting plans, voted Wednesday to return to work following nearly a week of unofficial strikes.

The workers had been out since last Thursday after GM unveiled plans to slash 12,000 jobs in Europe -- including 10,000 in Germany alone -- as part of a €500 million ($625 million) cost-cutting drive.

The work stoppages were illegal under German labor law, since they had been staged without an official strike ballot.

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