Mattis Molde
Everyone seems satisfied. Even though IG Metall – unlike at the conclusion of the collective bargaining agreements for the metal and electrical industry – did not issue a joint statement with management, all their statements on this result sound very positive. They welcome the result as “averting a clean sweep”.
Volkswagen CEO Oliver Blume said in a statement: “With the package of measures agreed, the company has set the course for its future in terms of costs, capacities and structures […] We are now in a position to successfully shape our own destiny again.”
The coalition government also welcomed the result, with SPD Chancellor Olaf Scholz praising the Volkswagen agreement as a “good, socially acceptable solution”. The compromise, he said, ensured that the group and its employees would have a secure future despite all the hardships.
In fact, the company’s management has pushed through its demands on three key points: 35,000 jobs at VW will go by the end of 2030. However, this massive job destruction will not take place through redundancies, but “only in a socially acceptable way”, that is, with severance payments or partial retirement. No plants will be closed immediately – which would not be that easy technically anyway – but production in Osnabrück and Dresden is being phased out. There are promises that “buyers or operators are being sought” for the future, the sort of promise which has not been kept for Ford Saarlouis, Vallourec Stahl or Thyssen Krupp, for example.
It is also regarded as certain that no other car company wants to take over an existing plant like this. There is already overcapacity in Europe, and when new plants are set up, as Tesla has done, they are set up at wages far below those of existing plants. In the case of Osnabrück, “Der Aktionär” Germany’s leading stock exchange weekly magazine, speculates, citing BILD newspaper, that the arms company Renk might be interested. The IG Metall trade union has not commented further on this way of securing the future.
The third demand of the bosses was an immediate 10% wage reduction across the board. What they got was that the 5.16% increase in the pay scales, which had been agreed in the industry-wide collective agreement for the next two years, will not be implemented at VW. At the same time, the working hours for those who previously worked less than 35 hours per week (employees hired before January 2005) will be extended by one or two hours to 35 per week, with partial financial compensation. Special payments will also be cut. These include holiday and Christmas bonuses and a bonus.
However, at VW these payments are regulated differently from the industry-wide collective agreement. As a result, the cuts are difficult to assess for employees of the company, and almost impossible to assess for outsiders. However, it is clear that the company is much closer to the 10% pay cut than the IG Metall is with its demand for 0%. Or to put it another way: it would be nice if the union had been as successful in the 2024 collective bargaining round in the metal and electrical industry as the board was at the VW round.
Last, but not least, IG Metall has “achieved” that in the future only union members will receive a bonus. Time and again, proposals are made in IG Metall to give members a better deal in collective agreements in order to prevent “freeloading”, namely that non-members receive the same wage increases as members. The issue is controversial in IG Metall. At VW, it is perverted: The special payments that are being cut for them are now being returned to members, who can then hand them over to IG Metall as membership fees. Those who act in this way fear mass resignations.
The bosses’ victory
“The jointly declared goal: the Volkswagen Passenger Cars brand will become the core of Volkswagen AG as the world’s leading volume manufacturer of technologically advanced vehicles by 2030”, is how the board describes the aim of the agreement. But only the workers will pay for it.
The employers spell out their success as follows:
“The agreement will achieve sustainable cost effects of more than €15 billion per year for Volkswagen AG in the medium term. Of this, over €4 billion per year will come from the current areas of negotiation in the medium term: labour costs, structural and production measures, and plant utilisation. The reduction in labour costs alone amounts to €1.5 billion per year.” (VW Group, media information no. 137/2024)
The board is therefore achieving “sustainable medium-term cost effects” that, at 15 billion, almost correspond to the 2023 profit of 18 billion. If the €1.5 billion reduction in labour costs affects wages, “structural measures” are likely to mean job cuts and “production measures” the relocation of production, in particular the relocation of Golf and Golf Variant production from Wolfsburg to Puebla in Mexico.
That still leaves €11 billion, which, according to the board, are directly or indirectly related “to this agreement”. Brand board member Thomas Schäfer had already mentioned before the last negotiations that €7.5 billion had already been saved in the current programmes, including in materials and logistics. On this occasion, he also renewed the demand for the €4 billion, which he has now received in full.
These €7.5 billion are paid by thousands of employees at VW’s own temporary employment agency, as well as those who work in plant and production logistics and at suppliers. This also costs tens of thousands of jobs and means even further wage pressure for many lower-paid employees.
Where the remaining €3.5 billion will come from, and whether and how anything was agreed in the 90 hours of negotiations, cannot be determined from the existing sources. What is certain is that, because of this agreement, not only will VW employees pay billions, but also tens of thousands of others will lose their jobs or incomes, many of whom are, or could be, IG Metall members. In Zwickau, by the way, the works council, shop stewards and the local IG Metall wrote an open letter drawing attention to the fate of 1,000 temporary employees who are already losing their jobs.
IG Metall’s red lines
IG Metall sees its success in the fact that its red lines have not been crossed. It thus distracts from the fact that it has agreed to the destruction of more than 35,000 jobs at VW alone. It does not even mention this figure in either its public or internal statements, and the people affected in other companies are not worth an explanation either. The only thing that has really been achieved is the red line that there should be no redundancies – for the core workforce! The loss of wages has only been postponed, along with the closure of two plants.
But these red lines have also signalled from the outset that IG Metall wants to meet the demands of capital – just like its early offer to waive the coming wage increase. Just like its efforts to decouple the VW wage round from the general wage round and its desperate attempts to limit solidarity from and with other workforces.
This attitude of the IG Metall and the VW works council leadership is not new, and even the fierce attack by the executive board could not and cannot dissuade them from it. The well-being of Germany’s largest car company has always been the most important thing for the union leadership. This also secures the bureaucracy supervisory board positions and a stable power structure within the union.
This social partnership also means representing the interests of the global corporation against the competition from other monopolies in a global industry. In the past, they went along with just about anything to achieve this: the restructuring of domestic production to focus on large SUVs and other inefficient luxury vehicles; exhaust gas fraud; limited or no solidarity with the group’s foreign workforces in the event of conflicts; and the withdrawal of support for the efforts of the American automotive union UAW to organise the local VW workforce.
This also includes close collaboration with the government: for example, in Brussels, IG Metall is working together with the government and the automotive industry association to find the optimal solution for German manufacturers at the expense of the environment (exhaust gas scandal). It publicly supports the government’s armament policy and tacitly supports the associated social cuts.
When metalworkers‘ unions around the world protest against the genocide in Gaza, IG Metall in Germany supports it to the best of its ability. For the sake of this social partnership in the struggle for the world market and world power, IG Metall and the VW general works council have sacrificed tens of thousands of jobs and billions in wages. Yes, the IG Metall leadership wanted this agreement to turn out the way it did. In two token strikes, the workers were allowed to blow off steam and bear the loss of wages themselves. No strike, not even a 24-hour one, was prepared for this purpose. The “industrial action that the Federal Republic has not seen in decades” (district leader Gröger) was never really intended.
This defeat of IG Metall is not the worst possible, but it brings it to the lowest point in its history. It has allowed the worst attack in decades on its strongest bastion. It did not really fight it, but “helped shape it socially”. And it has set an example for the entire industry, indeed for the entire working class: the potentially strongest and best organised wage earners, the “heavy battalions”, are not mobilised for the struggle even when under concentrated attack. IG Metall is thus not only betraying the immediate interests of its own members, but also effectively stabbing the entire class in the back.
A determined struggle at VW and in the entire auto industry could at least have heralded a turning point in the union, if not in the political arena. But the bureaucrats in the union leadership and in the group works council deliberately did not want to take the risks of such a struggle, because it would have effectively called into question the social partnership and class collaboration, whether intended or not. The bureaucracy wants to avoid that at all costs, even accepting a defeat without a fight, as long as it can only participate in the struggle in a ‘partnership’.
Breaking with subordination
No success for trade unionism is possible with this policy. Those who become the loyal henchmen of “their” monopolies in the global car war will also be in other wars, degrading the working class to a plaything and victim of government and capital, easy prey for reactionary ideas.
No turnaround is possible with the bureaucratic caste that runs this union. However, it is quite conceivable that individual forces among the officials will try to reposition themselves. It is crucial that something happens at the grassroots level, that the steps are taken towards building an organised class-struggle opposition that breaks with social partnership. Any criticism of the sell-out by sections of the apparatus can and must be used as a starting point:
- Formulate criticism, spread it via social networks, gather like-minded people! Introduce motions and resolutions in union bodies and works meetings!
- Use shop steward meetings for discussion again, win new colleagues!
- Network in the company, group and beyond! The bureaucracy has control over the structures. We need our own!
There are small beginnings for such networking, for example, the Networking for militant trade unions (VKG). Much more of it is needed and solidarity and democratic co-operation on a militant class basis.
The crisis is not over at VW, or in the metal industry as a whole. Action now is vital. Ultimately, the policy of the trade unions can only be changed if there is also a political alternative to the subordination to market forces and capitalist crises. The struggle for working people to decide what, how and where to produce must arise from the resistance against them bearing the brunt of the crisis.