VW managers, union set tosquare off in crucial wage talks
14 September 2004 , HAMBURG - German car giant Volkswagen and the metalworkers union IG Metall were getting ready Tuesday for negotiations on a new wage contract after a war of words which has already put both parties on a collision course. Amid calls for both sides to show a willingness to compromise and an awareness of their responsibility for the overall economy, the battle will be waged on business as well as ideological grounds. IG Metall, negotiating for 103,000 in manufacturing jobs at Europe's larg
14 September 2004
HAMBURG - German car giant Volkswagen and the metalworkers union IG Metall were getting ready Tuesday for negotiations on a new wage contract after a war of words which has already put both parties on a collision course.
Amid calls for both sides to show a willingness to compromise and an awareness of their responsibility for the overall economy, the battle will be waged on business as well as ideological grounds.
IG Metall, negotiating for 103,000 in manufacturing jobs at Europe's largest carmaker, is demanding a four per cent pay rise as well as job guarantees. It enters the talks in Hanover on Wednesday strictly rejecting rollbacks in pay and benefits.
VW, its earnings plunging amid high costs and a slump on the domestic car market and tougher competition on foreign markets, wants the union to agree to a two-year wage freeze in return for any job guarantees.
Coinciding with the new talks, the European Car Manufacturers Association ACEA in Brussels reported that the VW group's market presence in Europe had shrunk. It said that through August, the group's share had fallen to 17.7 per cent of a smaller market, from 18.1 per cent in the first eight months last year.
Meanwhile in remarks published on Tuesday, IG Metall negotiator Hartmut Meine said the union was going to fight for its demands.
"We are going to sweep Volkswagen before us," he told the Stuttgarter Zeitung newspaper. "The wage talks are going to be hard as a rock."
Meine however said both sides also must be responsible in showing a serious readiness to compromise and he dismissed any immediate prospect for strike action on the part of the workers. This stood in contrast to previous comments from the union indicating that protest walkouts and other labour actions would accompany the wage talks.
Meanwhile Volker Mueller, head of the employers association of the state of Lower Saxony where VW is based, told Deutsche Presse- Agentur, dpa that VW needs the wage freeze if the company is to maintain its payroll at current levels.
Last week, the of words between the two sides heated up when VW chief financial officer Hans Dieter Poetsch warned in a newspaper interview that the company could have to slash 30,000 jobs if the company is unable to extract the wage and cost concessions it needed from workers.
Poetsch told Wall Street Journal Europe that VW wanted to preserve its work force of some 176,500 employees in Germany, but that it will require concessions from labour.
"If we end up nowhere, which means no movement (in the negotiations) ... this would certainly be extremely negative for the employment situation in Germany," Poetsch told the paper about the possible adverse effects on VW payrolls.
Those remarks drew an immediate angry retort from IG Metall's Meine, who accused VW executives of "pouring oil on the flames" and irresponsibly playing with workers' fears about their jobs.
The conflict over wages and benefits rollbacks at VW is the latest to hit the German automotive industry in which the tone has become sharper as carmakers are scrambling for ways to survive the domestic car slump and fend off increasing competition abroad.
In July, DaimlerChrysler wrested a deal with workers to forego a wage increase and accept longer working hours in return for job guarantees. But the agreement first came after the company had threatened to slash some 6,000 jobs and move production elsewhere.
In late August, General Motors subsidiary Opel, running deeply in the red, presented workers with a catalogue of cost-cutting proposals which reportedly include a wage freeze up until 2009, longer working hours at no extra pay, and cuts in bonuses and other wage benefits.
Subject: German news