The management team of Germany’s largest industrial group has proclaimed a turning point in operations. Wage cuts, mass layoffs and factory closures are on the table. What to do now?
The Volkswagen Group may be facing a historically unique confrontation. Until now, a particularly far-reaching involvement of the leaderships of the Works’ Council and IG Metall, the metalworkers’ union (IGM), has been part of the company’s DNA, at least in Germany, while not for unions in countries like the US. It is true that there have been mass job cuts in Germany again and again in the past. However, these were implemented in close cooperation between management, works’ council leaders or trade union bureaucracy, and politics in a “socially acceptable” manner. This was associated with wage losses and increased work pressure.
High profits
For many years, the VW Group, with its 15 international brands, including luxury car manufacturers, such as Porsche, Bentley and Lamborghini, made high profits. Last year it was 18 billion euros net profit. In June of this year, a dividend of 4.5 billion euros was paid out to shareholders. Three months later, the board sounded the alarm and declared the crisis, for which the employees are now to bleed. Families who have worked for VW for several generations and who have generated profits, whose health has suffered, are now to be thrown onto the street.
VW loses ground
The management’s plans are about the core VW brand in Germany. The global overcapacities have a particular impact here. The former market leader in China is now behind the competition. Since the Wolfsburg-based carmaker has so far generated about forty percent of its sales, and even more of its profits in China, this is a warning signal from the capitalists’ point of view. In addition, the important European market has been stagnating for years.
Management plans
The aim of VW boss, Oliver Blume, the highest paid German manager, last year, with an annual salary of 10.32 million euros, is to drastically reduce labour costs. Currently, VW has 296,000 workers in ten factories in Germany, and the plan is to close three of these factories, meaning that tens of thousands of jobs are on the line. The number of apprenticeships is to fall from 1,400 to just 600. There is a threat of a ten per cent pay cut for everyone and a zero round for the current round of collective bargaining. The IGM rightly speaks of a ‘scandalous poison list’. Chief negotiator, Thorsten Gröger, threatened the employers: ‘If necessary, it will be a labour dispute the likes of which Germany has not seen for decades.’
VW’s significance
In view of what is at stake at VW and beyond, this is more than necessary. What happens in the Volkswagen Group is of paramount importance, both for big business and for the working class. If the management in one of Germany’s trade union strongholds succeeds in pushing through its plans to cut jobs, this would send out a signal. This would also motivate other corporate leaders to attack their employees in a similarly head-on manner. Successful resistance by workers in the VW Group would in turn provide an example to other workforces, such as those at Thyssen Krupp Stahl, who are also having to defend themselves against massive job cuts.
Attitude of the IGM leadership
The angry response of VW workers makes the offer of concessions from the heads of the Works’ Council and IGM even more incomprehensible. The sharp words spoken at the militant rallies and works meetings were followed by a deeply offensive proposal that accepts that workers need to make sacrifices. It is true that, correctly, the preservation of all factories is demanded. A possible wage increase, as part of the current round of collective bargaining, which is estimated at 1.5 billion euros (based on the size of the recently agreed regional collective agreement for the metal and electrical industry), is not to be paid out, but instead transferred to a ‘flexi-fund’ and thus “reduced working hours if necessary”. It states, “If under-utilisation occurs due to structural change in production and administration, the fund will help to ensure that staff reductions can continue to be carried out in a socially responsible manner.”
The union leadership is thus making another desperate attempt to save the ‘social partnership’ by indicating that the workforce is expected to pay the price of the crisis with wage cuts and job losses. But this doesn’t seem to be enough for the top bosses. Instead of making such offers, the IGM must now finally focus on a consistent fight to assert the interests of the employees – no wage cuts and the preservation of all jobs.
Fight!
Militant, critical members of the IGM, must now unite, discuss strategies of struggle and demand assemblies at which the substantive demands and the next steps are democratically discussed and decided.
Massive pressure from below is necessary for the leaders of IG Metall and DGB trade union confederation to give this dispute the highest priority. The IGM must use the fact that the end of the previous wage contract means the end of the ‘peace obligation’ at VW to mobilize the employees of the core brand for comprehensive strikes and to initiate the ballot for an indefinite industrial action.
If, as so often is the case, the IG Metall leadership is not ready for the necessary steps to mobilize colleagues, company and inter-company action committees should be formed that can discuss and, if necessary, organize strikes and occupations of production facilities. An example of this can be the wildcat strikes at the Opel plants in Bochum in 2004. At that time, the workers organized strikes independently, with the help of action committees and extraordinary works meetings, while the IG Metall leadership preferred to rely on negotiations with the company bosses instead of organizing the struggle to increase the pressure on the management.
Colleagues must also be involved in the struggle internationally and joint demonstrations must be sought. At works meetings, employees of the core brand should explain that in the event of the dam bursting at VW, the other brands in the worldwide VW Group could be hit by similar plans. In total, the VW Group worldwide employs 684,000 workers and already its Audi arm has announced the closure of a plant in Brussels with 3,000 job losses for February. This has led to massive protests – the next step would be to occupy the company to prevent this.
If factories are closed, entire regions threaten to topple. At every VW workplace there are neighbouring jobs at suppliers, in retail or the snack bar next door. Meetings should be offered in the affected cities, where trade unionists, social movements and left-wing organisations come together. Solidarity committees can be a good platform for people who now want to get involved in solidarity and should network nationwide. After all, colleagues in other corporations from Bosch to Ford to ZF and many others are also currently affected – this must be brought together. On this basis, it would be possible to build a nationwide movement – with an international impact.
Beyond the car
Regarding unfolding crisis in VW and the entire German car industry, there is also talk of management errors. The switch to electric vehicles took place too late, is one argument. Regarding the Chinese market, it is certainly a disadvantage that the German manufacturers can offer too few battery cars. However, this view is that of an alternative capitalist strategy. From the point of view of the working class, however, we should take a fundamentally different approach.
There are already far too many cars in this world. The switch to electric vehicles is not a full contribution to the fight against climate change and will exacerbate some environmental problems due to the consequences of the extraction of raw materials.
A radical expansion of local and long-distance public transport is needed. However, a conversion of production to these and other socially useful (and environmentally friendly) products is only possible if the large car companies are taken out of the hands of the major shareholders and transferred into public ownership. The companies must be placed under democratic control and administration by representatives of the trade unions, employees and the state.
In the case of VW, with the twenty percent stake of the state of Lower Saxony due to the blocking minority stipulated by the VW Act, there is already a starting point in which capital cannot make decisions without state approval. However, a complete nationalization is necessary, in which only small shareholders receive compensation. Within the framework of capitalism, this cannot be achieved in the long term. Therefore, today’s disputes must be linked to the struggle for socialist democracy.
