Four weeks ago it briefly looked as if the dispute over Volkswagen's austerity program had been resolved. After a long struggle, the supervisory board had agreed on a framework for the restructuring of the group, including the reduction of tens of thousands of jobs, but shortly afterwards it became clear: there is only a rough framework and the exact course is still being fought over. And so IG Metall and management met on Wednesday in Hanover for further negotiations. At the “Wienecke
As it became known in the early afternoon, VW management is terminating a whole series of collective agreements that regulate a number of areas of employment in Europe's largest car company. The terminations range from additional pay according to the collective agreement, which can optionally be converted into days off, to the remuneration of high-ranking employees in the “tariff plus” scheme, to issues relating to training. The collective collective agreement, which, among other things, regulates working hours in the group, could also be affected - a sensitive topic that is hotly debated in the industry. There has been a discussion going on at Mercedes in Stuttgart for weeks about ending the 35-hour week and allowing the workforce to work longer for the same money.
“A violent dispute is looming at the turn of the year”
The union and the VW Group works council immediately announced their resistance on Wednesday. “A violent dispute is looming at the turn of the year,” said a statement sent by IG Metall while the meeting was still ongoing in Hanover in the early afternoon. The announced time for possible protests has a collective bargaining law reason. In the upcoming struggle for a new collective agreement for the 130,000 employees of Volkswagen AG, the peace obligation ends on January 1st. Only then can IG Metall fight for its goals with warning strikes and thus significantly increase the pressure on management.
The entire German auto industry is in crisis and is trying to become more efficient, including through lower labor costs. The regulations in the VW Group are a lot more complex than in other German companies. While the employees of BMW and Mercedes, for example, are paid according to the collective bargaining agreement of the metal and electrical industry, VW's large West German factories have always had their own in-house tariff, which in the past has often left VW workers in Emden, Hanover, Wolfsburg, Braunschweig, Salzgitter and Kassel even better off than other colleagues in the auto industry. And while additional regulations in the industry are often regulated through company agreements, VW has special collective agreements for many details in daily working life, which are agreed not only with the works council, but also with IG Metall.
The situation becomes even more complex because almost two years ago, after a tough power struggle, another set of rules was concluded, the so-called future collective agreement. Even back then it was about cutting 35,000 jobs at Volkswagen AG. In return for the cuts decided, employment security was agreed with the union, which excludes redundancies for operational reasons until the end of 2030. Investments and possible prospects for locations were also agreed.
In the conversation on Wednesday, IG Metall originally wanted to find out which parts of this latest agreement still apply in view of the current crisis. IG Metall announced on Wednesday that the fact that a large number of other sets of rules containing numerous details for daily working life are now being abolished is confusing “two different issues”. Daniela Cavallo, the chairwoman of the group works council, appeared combative: "The board obviously believes that it can blackmail us: simply threaten to close down plants and then, in the next step, also want to implement the next collective bargaining cuts. But this calculation will not work."
Competition from China, tariffs from America and price pressure in Europe
The VW Group, on the other hand, does not want to get involved in such discussions. “You can’t separate it all, costs are costs,” says a manager. Internally, as in the past few weeks, reference is made to growing competition in China, American tariffs and increasing price pressure in Europe, which is also arising because Chinese brands are expanding rapidly here. All of this has led to the situation becoming even worse since the last major power struggle two years ago. “That’s why we now have to talk to our partners from the works council and IG Metall about what we can do to achieve our goals.” Above all, the company is threatening to phase out work in up to four factories in Germany in the next decade: in Emden, Hanover, Zwickau and Neckarsulm. There is fear among the workforce that the plants will finally close.
The company's chief negotiator, Arne Meiswinkel, officially announced in the afternoon that the situation in the automotive industry was extremely challenging. “I think everyone feels, given the news from across the automotive industry, that we need to act now.” Various regulations in the contracts terminated on Wednesday would now have to be adjusted “in view of the current cost pressure”. VW expressly emphasizes in its own report that it has not terminated the “future collective agreement” concluded a year and a half ago. The job security agreed therein until the end of 2030 will therefore continue to apply.
Further discussions are now scheduled to follow in the second half of October. With a view to the specific remuneration rules in the company tariff, IG Metall has already announced that it will demand a wage increase of five percent, as is the case across the board. As expected, this is rejected by the company's management. It says they want to achieve effective cost reductions and cannot afford further increases.
It is expected that the conflict will continue to escalate, also because there is no tailwind from the market in sight. At the same time, the group is confident that an agreement will be reached on a number of key issues this year.
