VW’s German Workers Win Raises In Pay Deal
Source: National Memo
Volkswagen’s German factory workers will get a two-stage raise under a new wage deal reached as the automaker grapples with slipping sales and profit.
The company said Tuesday it agreed with the IG Metall union on increases of 3.4 percent from Sept. 1 and 2.2 percent from July 1 of next year through February 2015. The agreement covers 102,000 workers in six west German auto plants.
Volkswagen AG personnel head Horst Neumann said the deal went “to the limit” of what a tough auto market would allow.
Volkswagen, whose brands also include Audi, Porsche, SEAT and Skoda, saw profit fall 38 percent in the first quarter as European car sales slumped in a recession. Sales of VW brand vehicles fell 7.9 percent in the first four months of the year.
Read more: http://www.nationalmemo.com/vws-german-workers-win-raises-in-pay-deal/
How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much
In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz), and Volkswagen—are very profitable.
How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that “the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.”
There are “two overlapping sets of institutions” in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the country’s equivalent of the United Automobile Workers. Virtually all Germany’s car workers are members, and though they have the right to strike, they “hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties,” according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for “works councils” in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, “where you don’t always wear your management pin or your union pin.”
Mund points out that this goesagainst all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.
Germany's 'secret' seems to be 1) no 'right to work' - all auto workers belong to a union and 2) unions are guaranteed a position on the company's board of directors and "work councils" on the shop floor.
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