War of words heats up ahead of VW wage talks

9 September 2004

WOLFSBURG – The war of words ahead of crucial wage negotiations at Volkswagen heated up Wednesday amid a warning by a top VW executive about slashing 30,000 jobs, triggering a rapid rebuke by the metalworkers union IG Metall.

Ahead of the 15 September startup of negotiations for a new wage contract, VW chief financial officer Hans Dieter Poetsch, in an interview in the Wall Street Journal Europe, called on IG Metall to acquiesce in VW’s cost-cutting drive.

VW wants its workers in Germany to go along with a two-year wage freeze and other concessions in order to help the car giant slash costs and boost competitiveness.

But IG Metall is seeking a 4 percent wage hike and has issued warnings that it will stage warning strikes and other protest actions to back up its demands in the upcoming wage talks.

Poetsch said VW wants 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.

When pressed about how many jobs the company might slash, Poetsch was quoted as saying “30,000-plus”.

In Hanover, IG Metall officials blasted Poetsch’s comments.

“The fact that individual management board members at Volkswagen are repeatedly pouring oil on the flames of the wage conflict is completely unacceptable,” said Hartmut Meine, IG Metall’s chief wage negotiator in the upcoming talks for a new pay deal.

Meine said it was irresponsible to play with peoples’ fears about their jobs. He said IG Metall was sticking to its demands for a 4 per cent pay rise and a guarantee for the 103,000 manufacturing jobs at VW plants.

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.

DPA

Subject: German news