Volkswagen CEO Herbert Diess has been facing off with the company’s German workforce for weeks over the changing nature of the business. VW vowed to transition itself toward an all-electric lineup following the 2015 diesel emissions scandal. But the necessary steps to get there haven’t been universally appreciated.
The general assumption has always been that electric vehicles would result in massive layoffs across the industry by nature of their needing fewer parts than internal combustion vehicles. But Volkswagen seems worried that it’s falling behind smaller rivals and needs to take decisive action to make sure it’s not outdone by firms operating in the United States and China. The proposed solution is an industrial overhaul designed to fast-track VW’s electrification goals. Unfortunately, German labor unions are convinced that this plan would incorporate massive layoffs and have become disinclined to offer their support. The issue worsened in September when Diess told the supervisory board that a slower-than-desired transition to EVs could result in 30,000 fewer jobs.
With environmentalism sweeping through the automotive industry of late, manufacturers are spending oodles of cash to fund the continued development of electric vehicles. Unfortunately, the are doing this during a period where the developed world’s taste for cars has already reached its zenith — or so it seems. Growth is slowing in markets across the globe and cuts have to be made somewhere if the industry players want to keep their bottom line positioned firmly in the black.
A recent report from Bloomberg, estimated that around 80,000 auto jobs will be eliminated in the coming years as a result of electrification — with the majority concentrated in the United States, Germany, and United Kingdom. Though the onslaught of cuts will not be limited to the developed world, nor entirely the fault of EVs.
On Wednesday, Daimler’s German workers union publicly expressed concerns that neo-Nazis are trying to organize within the automaker’s ranks. While it did not specify which political groups were involved, it named several individuals from the Untertürkheim Mercedes-Benz plant in southern Germany and described the overall situation as “not acceptable.”
The works council believes Nazis are currently using Zentrum Automobil, an alternative labor union formed in 2009, as a base of operations to infiltrate the factory and placed several of its members on its board. “The Untertürkheim plant now appears in the media as a reservoir for neo-Nazis and a center of right-wing extremist activities,” explained members opposing the supposed infiltration.
That’s not great publicity for a German automaker with a rich history dating back through the Second World War. However, if the last year has taught us anything, it’s that the term “Nazi” currently gets thrown around more than a frisbee at a picnic. Are the claims valid?
With the UAW currently coping with a high-profile corruption scandal in the United States, news of Germany’s widespread auto strikes has taken a backseat in domestic media. Last Friday, IG Metall concluded its third day of striking against Mercedes-Benz, Ford, Porsche, Audi, VW, and BMW.
However the 72-hours of downtime may only be the appetizer in the German union’s strike-buffet. While both IG Metall and the manufacturers have expressed a willingness to resume talks on Monday, the union remains on the cusp of a vote that could extend striking indefinitely. Here’s why they are so pissed:
Tesla Motors has said it is making efforts to resolve outstanding issues with Grohmann Engineering’s legacy clients, including Daimler, BMW, Bosch, Intel, and Volkswagen Group. After the Tesla takeover last November, CEO Elon Musk indicated to Grohmann’s management team that the brunt of its efforts should be diverted away from former customers in order to focus primarily on production facilities related to the Model 3.
The move placed Musk at odds with company founder Klaus Grohmann, eventually resulting in his abrupt departure, and was a major source of tension among the German workforce — which, backed by IG Metall, has threatened to strike. Negotiations have already yielded improved worker pay and hiring promises, but Tesla now appears to be tackling the issue of how to handle the numerous clients who have been hung out to dry.
Tesla Motors has smooth-talked its Californian workforce out of unionizing for some time, but the labor war is now being waged on two fronts.
Since acquiring German supplier Grohmann Engineering, that company’s workforce has accused Tesla of unfair wages and dissolving established business ties to focus solely on the upcoming Model 3. Elon Musk was forced to personally reassure Grohmann, now called Tesla Advanced Automation Germany, to keep it from syncing up with autoworkers’ union IG Metall and going on strike.
Since the supplier is an essential part of the Model 3’s timely production, Tesla has changed tactics and is now throwing more money at Germany and promising extra jobs in the hope of avoiding work stoppages. It also apparently removed the company’s CEO and founder, Klaus Grohmann, after repeated clashes with Musk over the firm’s future.
It’s no secret that the success of Tesla’s forthcoming Model 3 will dictate its position as a mainstream automaker for the foreseeable future. Tesla’s current status as the most valuable carmaker in the United States is riding, almost entirely, on the problem-free assembly of its “affordable” EV this summer. So, when one of its German suppliers threatened to go on strike earlier this month, you can imagine the series of panic attacks CEO Elon Musk probably suffered.
Last week, the company’s recently acquired industrial robotics unit Grohmann began labor negotiations over insufficient wages and Tesla’s decision to suspend all contracts that didn’t pertain specifically to the Model 3. And, to ensure things went his way, Musk has become directly involved in the process.
While former EICs Schmitt and Niedermeyer documented the increasing co-operation between the UAW and IG Metall, recent developments have taken the relationship to new twists and turns. First there was the appointment of IG Metall bigwig Bernd Osterloh to VW of America’s board of directors. Now, Reuters is reporting that the two unions, along with the VW global works council, have signed a letter of intent to represent VW workers at its Chattanooga, Tennessee plant.
The horse-trading between Volkswagen, the UAW and IG Metall that eventually led to both the UAW’s “voluntary union” and the new crossover’s production at Chattanooga isn’t quite over yet. Buried deep in VW’s announcement is the news that Volkswagen’s board member in charge of their global Works Council Bernd Osterloh will join the Volkswagen Group of Amerca’s Board of Directors.
While Volkswagen works to find a way to establish a works council at their Chattanooga, Tenn. plant in the wake of the failed United Auto Workers election and subsequent appeal to the National Labor Relations Board, German union IG Metall is warning against the establishment of what it calls a “yellow” union at the plant, or one that has been established by Volkswagen.
Following the same road map that led to the ongoing organization efforts at Volkswagen’s plant in Chattanooga, Tenn., the United Auto Workers have allied with German union IG Metall and Daimler’s works council on their march toward Mercedes-Benz’s MBUSI plant in Vance, Ala.
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