Audi, a subsidiary of German automaker Volkswagen, will cut 9,500 jobs in Germany over the coming five years. This will leave just over 50,000 jobs at the company's operations, down from the current level of 61,000.
The job cuts are part of a global offensive against autoworkers, which experts expect to cost the jobs of at least 15 percent of the 820,000 workers in the auto and parts industries in Germany alone. Over the last year, BMW, GM, Ford, VW, Nissan and other global automakers have carried out mass layoffs of production and white-collar workers in North America and Europe, while hundreds of thousands of workers have lost their jobs in India and China.
Worldwide car sales fell in 2018 from 81.8 million to 80.6 million and are anticipated to decline by another three million this year, the largest drop since the Great Recession. The global economic decline has intensified a brutal competition between the transnational auto giants for profits and to corner the emerging market for electric and self-driving vehicles. The restructuring of the global auto industry is leading to a wave of planned mergers, consolidations and a brutal campaign of job- and cost-cutting.
In this March 24, 2018, file photo, part of the assembly line at German car producer Audi plant in Ingolstadt, Germany. The automaker said Tuesday Nov. 26, 2019 that it is cutting 9,500 jobs in Germany through 2025.(AP Photo/Matthias Schrader, File)
The Audi jobs massacre has the full backing of the IG Metall trade union and works council, which spent the past several months working out the details of the layoffs with management behind the backs of the workers.
Central works council chairman Peter Mosch had the temerity to suggest that the elimination of virtually one in every six jobs was a successful outcome. “After months of talks, we were able to avert the original cuts demanded by the company in most areas,” he asserted. Mosch also presented the avoidance of “compulsory redundancies” and a pledge to hire 2,000 “specialists” for electric vehicles as victories.
The remaining workers will face wage cuts. According to the agreement, the profit-sharing payout, which currently stands at €3,600 (US $3,996) for production workers, will be frozen or cut if the operating profit falls or remains the same. If profits rise significantly, however, the payouts will not automatically increase.
Central works council chairman Mosch belongs to a layer of trade union bureaucrats who have made lucrative careers within Germany’s corporatist system of labor-management “codetermination.” Along with the Audi central works council, which he has headed since 2006, Mosch also serves as deputy chair of Volkswagen's works council and is a presidium member of VW's global works council. He is also deputy chair of Audi's supervisory board, a member of the VW supervisory board presidium, and a member of the permanent committee to Porsche's supervisory board.
According to Volkswagen AG's business report, Mosch's activities on VW's supervisory board alone netted him €300,000 (US $330,000) per year in 2016 and 2017.
Audi is aiming to save €6 billion with the job cuts. This will be used to push up its dividend payouts from 9 percent to 11 percent, a phenomenal result for investors, given the low interest rates. Audi is also seeking to catch up with its two main competitors, the high-end manufacturers Mercedes and BMW, which both recently unveiled major job cuts and cost-cutting programmes. Part of the money saved by Audi will be invested in electric vehicles and other new technologies.
In addition to mounting competition on global auto markets and technological changes, Audi confronts further crises. The diesel scam is costing Audi billions, since the VW premium brand served as a development center for Volkswagen and was thus deeply implicated in the development of engines and the specific emissions control software that switched off when the vehicle was not in a test setting.
Over the past seven years, Audi has gone through seven heads of development. Bram Schot, who took over from former chief executive Rupert Stadler following the latter's imprisonment due to his role in the emissions scandal, will be replaced in April next year by BMW executive Markus Duismann. Schot has not moved on yet because BMW has refused to let Duismann leave sooner.
The transition to electric vehicles, which Audi and the rest of Germany's automakers long ignored, requires billions of euros in development costs. Audi intends to bring 30 electric vehicle models onto the market by 2025. At the same time, electric-powered vehicles require far fewer parts than internal combustion engine-driven cars, leading to predictions of even deeper job cuts.
At the end of October, Audi was forced to cut its sales forecast for the current year. In Audi's two main plants in the cities of Ingolstadt and Neckarsulm, production output will be reduced under the agreement now concluded with IG Metall. In Neckarsulm, which has an annual capacity of 300,000 vehicles and focuses mainly on producing the Audi A4 to A8 and R8 models, fewer than 200,000 vehicles will roll off the assembly lines this year for the third time in a row. Going forward, annual production will be 225,000 cars.
In Ingolstadt, which has capacity to build well over half a million cars, just 491,000 vehicles were produced last year. In the future, the plant will produce 450,000 cars.
Audi’s parent company VW, the world’s second largest automaker, is also engaged in a major job-cutting programme, also with the collusion of IG Metall. Three years ago, VW central works council chair Berndt Osterloh signed the notorious “future pact” with VW brand chief Herbert Diess, who now heads the Volkswagen corporation. That agreement cost 30,000 jobs around the world, including 23,000 in Germany. The works council and management at the VW brand are in the process of preparing a new edition of their pact.
Over the last two years, there have been increasing struggles by autoworkers, including in Romania, Hungary, the Czech Republic and other Eastern European countries, China, India and Mexico, along with workers in Germany, France and Great Britain. Earlier this autumn, 48,000 GM workers in the US waged the longest national auto strike in nearly half a century.
Workers are increasingly coming into a direct conflict with the pro-capitalist and nationalist trade unions, including the United Auto Workers in the United States, which is engulfed in a corruption scandal that has revealed the fact that the UAW is a bribed tool of management.
The giant corporations and the powerful financial interests behind them have an international strategy to attack workers. Autoworkers need a global strategy to respond. This requires the building of new organizations of struggle, rank-and-file action committees, which reject the nationalist poison promoted by IG Metall and other unions and fight to coordinate the struggles of autoworkers across all borders.
While modern technology presents unprecedented opportunities to raise the living standards and cultural level of all of humanity, the exact opposite is taking place under capitalism. The riches of society end up in the pockets of a tiny minority, while rotting capitalism produces mass poverty, fascism and war. That is why the emerging mass struggles by autoworkers and every section of the working class must be fused with an international socialist programme, including the transformation of the global auto industry into a public enterprise, collectively owned and democratically controlled by the working class.
A socialist response to
the global jobs massacre
in the auto industry
29 November 2019
On Tuesday, the German automaker Audi announced 9,500 job cuts over the next five years, with one out of every six workers losing his or her job.
This announcement is part of a global jobs bloodbath in the auto industry. Since the beginning of the year, some 350,000 auto jobs in India and 220,000 in China have been destroyed. With the agreement of the union-aligned works council, Volkswagen has eliminated 30,000 jobs over the past three years, while increasing productivity by 25 percent over the same period.
Ford is currently eliminating 12,000 jobs in Europe and 7,000 in North America. Nissan is cutting 12,500 jobs worldwide. General Motors is closing four plants in the US and Canada and slashing 8,000 jobs. Similar plans exist at Daimler, BMW, PSA and other automakers.
The situation is even more dramatic in the parts industry. Continental has announced plans to eliminate 20,000 jobs in the coming 10 years. Bosch has already slashed 2,500 jobs in Germany this year and plans to cut a further 3,000 by 2022. Other parts suppliers, including ZF, Schaeffler and Mahle are also doing away with thousands of jobs.
An autoworker prepares a chassis to receive an engine on a new aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant in Claycomo, Mo. (AP Photo/Charlie Riedel)
These developments make clear that workers need an internationalist perspective and a socialist programme to oppose the attacks on their jobs, working conditions, and wages.
They confront not only globally operating automakers and their billionaire shareholders, but also the trade unions and works councils, which collaborate with management to draw up the cuts and help implement them. Without breaking from these corrupt, pro-company apparatuses and establishing independent rank-and-file committees to unite their struggles internationally, workers cannot defend a single job.
This is made particularly clear by events at Audi. The elimination of jobs at the company was prepared and planned in months-long secret talks between management, the trade unions and the works council.
“There are no desperate demonstrations with red flags in front of the plant gates,” wrote a somewhat surprised Süddeutsche Zeitung . “On the contrary, the plan and the number of cuts were worked out by (Audi CEO Bram) Schot in cooperation with the works council, and both sides almost sounded euphoric on Tuesday.” Works council Chairman Peter Mosch praised the jobs massacre as an “important milestone.”
The automakers and trade unions justify the attack on jobs and the wages by pointing to the global decline in sales and the introduction of autonomous and electric vehicles, which entails high development costs but fewer steps in the production process.
In fact, developments in the auto industry show the absurdity of the capitalist system, under which technological development is used to intensify the exploitation of the workers, fill the pockets of a tiny super-rich elite, and throw hundreds of thousands into poverty. It provides a powerful argument for the transformation of the global auto industry into socially owned property, its placement under workers' control, and its organisation on a world scale according to a rational plan to meet human need, not private profit.
The global automakers are using new technologies as a battering ram to destroy the rights and achievements secured by workers in the course of decades of bitter struggles. These attacks began in the 1980s and autoworkers' wages have stagnated or declined ever since.
Temporary and contract employment and other forms of precarious work have long become a prominent feature of the auto plants, with the approval of the trade unions. In the United States, the Obama administration restructured General Motors and Chrysler by halving the wages of all new-hires. Starvation wages in Asia, Latin America, Africa and Eastern Europe are being exploited to push down wages everywhere.
The introduction of automation and artificial intelligence is not being used to make work easier, but to “Amazon-ize” it, i.e., to oversee and control every action and every second of the work day. To slash development and production costs, and conquer new markets, automakers are merging to form ever larger companies. PSA (Peugeot) and Fiat-Chrysler recently agreed to join forces to form the world's fourth-largest automaker, behind Renault/Nissan, VW and Toyota.
The world market is dominated by huge monopolies that dictate wages and prices, and wage a bitter struggle for market share, which increasingly coincides with the imperialist powers' preparations for war.
Growing numbers of workers are resisting these attacks. In Matamoros, Mexico, tens of thousands of highly exploited workers in the auto parts industry downed tools for several weeks earlier this year. In the United States, 48,000 GM autoworkers participated in the longest strike in 50 years. Strikes by autoworkers have also taken place in India, China, Romania, Hungary, the Czech Republic, Germany, France, Britain and other countries.
But wherever these militant struggles break out, they immediately come into conflict with the trade union bureaucracy, which sabotages them and sells them out. Germany's IG Metall, the United Auto Workers in the United States and the other unions long ago ceased to be workers' organisations that struggle for social improvements and reforms. Instead, they function as co-managers and a labor police force in the plants, tasked with intimidating workers and imposing management’s diktats.
This role is determined both by the trade unions’ social position and their political program, which are inextricably connected.
The trade union functionaries and works councilors earn incomes that workers can only dream of. This may take different forms from country to country, but the essence remains the same. In the United States, UAW President Gary Jones and other leading officials were forced to resign after stealing millions of dollars in trade union funds. In Germany, payments for the trade unions' services are legally codified in the system of so-called "co-determination." Works council chairs like Berndt Osterloh (VW) and Peter Mosch (Audi) earn annual salaries in the upper-six-figure range.
The trade union bureaucrats are hostile to the class struggle and are nationalist to the core. Like the corporate executives, they see their task as securing a competitive advantage for their “own” corporation against its domestic and foreign rivals. To achieve this, they are prepared to agree to anything, from wage cuts to mass layoffs and the shutdown of plants, like the Opel plant in Bochum. If they occasionally call strikes or protests, they do so only to let off steam and prevent the mounting opposition among workers from escaping their control.
To suppress the class struggle, the union executives aim to establish the closest cooperation with the governments and the corporations. For example, Roland Zitzelsberger, IG Metall head in the state of Baden-Württemberg, a centre of Germany's auto industry, recently boasted in an interview about the so-called transformation council. This council includes trade union officials, works councilors, corporate executives, government representatives and academics, who gather around a table to discuss economic strategies. This form of class collaboration found its most finished form in the corporatist state of Italian fascism during the 20th century.
To break out of the trade unions' suffocating grip, the World Socialist Web Site and Socialist Equality Party call for the formation of rank-and-file committees opposed to the trade unions and works councils.
In contrast to the unions' pro-capitalist and nationalist policies, these action committees will base their strategy on the rights and requirements of the workers, which are irreconcilable with those of the capitalists.
In response to the global strategy of the transnational auto companies, rank-and-file committees will advance their own international strategy aimed at unifying autoworkers across the world in a common struggle to defend the right to secure and good-paying jobs for all workers. The World Socialist Web Site will do everything in its power to assist autoworkers in building rank-and-file action committees, establishing lines of communication across factories and national borders, and building the leadership in the working class that is necessary to put an end to capitalist exploitation once and for all.
German autoworkers protest as unions sanction wave of jobs cuts
Last Friday, the IG Metall trade union organized a day of action on the Schlossplatz in the centre of Stuttgart. The unions called the protest in hopes of dissipating the anger of workers who are increasingly denouncing IG Metall and its works councils for collaborating in the slashing of tens of thousands of jobs in the auto and auto parts industries.
Stuttgart in Baden-Württemberg is one of the most important centres of the German car industry, but resistance by workers against the corporations, trade unions and the grand coalition government of the Christian Democrats and Social Democrats is developing throughout Germany.
Car production is Germany's most important industry with 820,000 jobs in manufacturing and supply chain. About the same number work in the sales, repair and service sectors. With global sales declining and an increasingly bitter struggle to cut costs and dominate the market for electric vehicles—which require less labor than traditional internal combustion engine vehicles—the fate of one and a half million people lies in the balance.
Hardly a day passes without a large or small company in Baden-Württemberg announcing redundancies and cost-savings measures. Bosch, the leading supplier, has already eliminated 2,500 jobs this year. By 2022, 3,000 more are to follow in Schwäbisch Gmünd, Feuerbach, and other locations.
At suppliers Mahle, Mann+Hummel and Marquardt, 3,000 workers have already lost their jobs this year. Tyre manufacturer Continental is planning to cut 7,000 jobs nationwide, ZF Friedrichshafen 2,300 jobs and Schaeffler 700.
On Tuesday, Audi announced it would be cutting 9,500 of its 61,000 jobs in Germany by 2025, only hiring 2,000 experts in e-mobility and other future-oriented fields. The company reached an agreement with the works council on the cuts after several months of negotiations.
Audi, which belongs to the VW group—the world’s second largest automaker—wants to generate around six billion euros through the savings program, and thus increase its target yield from nine to eleven percent. Audi is trying to catch up with the other two luxury brand manufacturers, Mercedes and BMW, who are also implementing massive redundancy and cost-cutting measures.
The announced reduction is only the beginning of an unprecedented jobs massacre. In Baden-Württemberg alone, 470,000 people work in the production of vehicles with combustion engines. The Centre of Automotive Management at the University of Applied Sciences of Economics in Bergisch Gladbach has calculated that 10 to 15 percent of jobs in the automotive industry will be lost in the next ten years.
In the end, there could be considerably more. Companies are making the extent of the cuts dependent on their profit rates rising. Professor Oliver Falck, automotive expert at the Ifo Institute, said, “How many of these jobs will be lost depends on how many of the electric cars that will be in demand worldwide in the future are built in Germany, and how fast the increase in electric vehicles will be.”
Daimler workers in Sindelfingen, Untertürkheim and Mettingen, who spoke to WSWS reporters in recent weeks, said that their colleagues felt insecure because everyone feared for their jobs. Neither management nor IG Metall had told them anything and many workers expressed their anger with IG Metall for abandoning them.
At Daimler Untertürkheim, where combustion engines are produced, the works council has been negotiating the future of 19,000 jobs since mid-October. This has focused on what concessions the workers will give up so that the electric drive train (EATS)—consisting of electric motor, transmission parts and power electronics—can be produced in this plant.
One month before the start of negotiations, works council chairman Michael Häberle said, “If we don’t get this product here, we will lose jobs in the long term.”
Three months later, at the action day in Stuttgart, the same Häberle said with the usual trade union bluster, “For a long time, I was sure that the company also recognized this urgency and would support our production location.” But during the negotiations, it had become clear to him that the current financial situation had “clouded the farsightedness of our Executive Board.”
Häberle, who himself sits on the Supervisory Board and is involved in the decisions of the Executive Board, indicated that the Untertürkheim site was not secure and that he had already agreed to job cuts. ‘Instead of developing future prospects with us, several companies are announcing job cuts and production relocations,” he complained.
This turns things upside down. In the name of its “future prospects,” IG Metall has already given the go-ahead to the reduction of more than ten thousand jobs at Bosch, Mahle, Continental, ZF and Schaeffler, and will do the same at Daimler.
At the Schlossplatz in Stuttgart, IG Metall regional director Roman Zitzelsberger once again offered the companies the services of the union, “All employers must know: shaping the future is only possible together,” he said. “Change is coming, and we must not bury our heads in the sand."
The managing director of the employers’ organisation Industrieverband Südwestmetall expressed a very similar view. Peer-Michael Dick told the Tagesschau before the day of action, "Employees must go along with this transformation, they must be ready for change, they must educate themselves further. But jobs will also be lost, so we as employers, but also IG Metall, must be honest. Unqualified people, poorly qualified people and simple jobs will be lost in the transformation process".
Dick told the Stuttgarter Zeitung that the IG Metall would have to make concessions in the collective bargaining round that starts at the beginning of 2020, “Without sacrifices, the transformation will not succeed.” It was about more than one agreement, it was about “the future of the social partnership” with the unions. According to Zitzelsberger, IG Metall is already negotiating cost-cutting plans and staff reductions in 160 metal companies in Baden-Württemberg.
The statements by Dick, Häberle and Zitzelsberger must be taken as a warning. As a partner of the car companies, IG Metall is helping plan and implement these social attacks. Like its union counter-parts throughout Europe and the world, IG Metall functions as a company police force and its officials are highly rewarded for suppressing the resistance of workers.
In a telling comment, Stuttgarter Zeitung wrote that in the current crisis, job security is the top priority, not “significant wage growth.” It continued, “The union is reversing course at a fast pace—that’s a good thing. Now it has yet to convince all its members of the new course. ... In the worst-case scenario, Baden-Württemberg could be threatened by creeping deindustrialisation.”
In fact, it is IG Metall’s collaboration with the corporations that is leading to deindustrialization. The consequences would be devastating for hundreds of thousands of workers and their families. This can only be prevented if workers take the conduct of the struggle into their own hands by forming rank-and-file action committees, which are independent of the pro-capitalist and nationalist IG Metall and other unions.
The introduction of new technologies such as electric vehicles and artificial intelligence into the production process is a progressive development that could reduce workloads and raise the standard of living of all. But under capitalism, these technologies are being used to toss workers into the streets where they will starve right next to the riches they have produced. That is why workers themselves must take control of production, as part of a broader struggle for socialism and reorganization of world economy to meet human needs, not private profit.
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