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Crisis in Europe’s Auto Industry: Labour Struggles, Class Conflict, and the End of Social Partnership

We have on several occasions pointed to the automobile manufacturing sector as an indicator of the shifting economic and, consequently, political balance of power between States. It is inevitable that this also applies to the dynamics of the labour market and therefore to the balance of power between classes.

A new social cycle

The emergence of the Chinese imperialist giant is also shaking up social relations in the old metropolises. We have defined this moment as the descending phase of social-democratisation, the era in which the “conquests” of the previous ascending cycle are called into question. It is the phase in which what was believed to be guaranteed, including in terms of employment relationships, is in danger of being lost. What appears at first glance as merely an effect of technology (in this sector, specifically the development of the electric car) in fact reflects a more general shift in influence between States and between classes.

These changes leave their mark especially where those guarantees were perceived as a constitutive part of the employment relationship. Once again, Germany is the clearest test of the new cycle. This is evidenced by the alarm over the paralysis of the social partnership, that is, of that perennial illusion of being able to co-manage an unmanageable reality such as the capitalist world market. The business daily Handelsblatt [October 31] writes: just when “the hour of social partnership — the balance between the interests of employees, companies, and shareholders — should be ringing, [...] conflicts are escalating [...] and collaboration is in danger”.

The Volkswagen affair appears to be the paradigm of this reality, but it is the world that has changed, not just Germany, notes Die Zeit [November 28th]: “It is true, Germany is no longer as attractive as it used to be”, but global technological and commercial upheavals cannot be ignored. It is also true, however, that “German managers are too lazy and too self-confident”.

Defensive struggle at Volkswagen

The employers’ demands in the Volkswagen crisis were summarised in the “poison list”, as IG Metall christened it: a reduction of employees (up to 55,000), with plant closures (two or three), and a 10% wage cut. The union has reacted by organising strikes, but also by putting forward a counter-proposal: the postponement of the 7% wage increase contained in the framework for the renewal of the company contract, in order to allocate the corresponding amount to a fund to cover the reductions in working hours imposed by the drop in sales.

Meanwhile, parallel to this dispute, IG Metall signed an agreement for the contract of the entire metalworkers sector (which does not include VW), reaching a compromise. On the plus side is a wage increase of 5.1%, in two instalments, with a one-off payment of €600; including other benefits, the real increase is 5.5%. On the downside, however, is an extension of the contract term to 25 months, as well as a rule allowing struggling companies to avoid applying the wage increase in full, a derogation which had been included in the previous contract.

After 70 hours of negotiations, a compromise was also reached at Volkswagen: the union can count among its achievements that no factory will be closed, but on the negative side, there will be 35,000 fewer workers by 2030; the reduction will take place in “socially acceptable” ways, meaning no layoffs, but through voluntary redundancies and freezing recruitment. Some production lines will be closed, including at the Wolfsburg headquarters, to reduce production capacity by 734,000 units per year. Also included in the agreement is the union’s counter-proposal to postpone the wage increase (the “good 5%” won by the metalworkers) until 2030, in order to finance reductions in working hours in the meantime.

In short, this was a defensive struggle in which IG Metall had to accept “painful contributions from the employees”, as chief negotiator Thorsten Gröger put it. In “historically adverse economic conditions”, with several companies expecting reductions in employment (from ThyssenKrupp to Bosch, from Ford to Schaeffler, and so on), the union had to deploy all of its organised strength to limit the retreat. This is worth considering, because similar conditions affect the whole of Europe.

A European cycle

Italy is no exception: the Stellantis case is the most glaring example of this. After the resignation of Carlos Tavares, the question remains as to who will be the next head of the group, but the real issue is the gradually shrinking workforce, which is a quarter smaller today compared to the birth of the group in January 2021, with a reduction of 53,000 to 40,000 [Corriere della Sera, December 5]. These are incentivised redundancies, to mitigate social repercussions, accompanied by the use of redundancy funds and furlough schemes, which still reduce wages. Other disputes have opened up in the supply chain, where the link with Germany and its demand of components also weighs heavily.

At the same time, the struggle for the renewal of the metalworkers’ contract is underway in Italy too, with the first strikes in response to the employers’ refusal to take into consideration the trade unions’ demands regarding wages, working hours, job security, and procurement. Yet, according to ISTAT data, the contractual real wage of a metalworker declined by 7.3% between 2021 and 2023 alone. And it took Mario Draghi, former governor of the ECB, to state that a model reliant upon “low wage growth to increase external competitiveness” today “is no longer sustainable” [Corriere, December 16].

The Stellantis affair also affects Paris, where FCA’s partner Peugeot is based. Moreover, many companies in France are expressing their intention to reduce employment, starting with the automotive sector: Michelin, Valeo, and Forvia. Then there is the steel industry, commerce (Auchan), chemicals (Vencorex), and even Airbus. According to the General Confederation of Labour (CGT), there are 200 crisis plans with 150,000 jobs at risk.

In the automotive components industry, according to CLEPA, the European industry association, 56,000 jobs have been lost since 2020, and another 32,000 redundancies have been announced for the first half of 2024 [La Stampa, November 21].

There are two classes

It is precisely the vast scale of the restructuring processes and their connection to the world contention between the powers that opens the door to the potential instrumentalisation of workers in social-imperialist campaigns. This is why it is crucial to leverage one simple and firm point: there is a European bourgeoisie, and there is a European proletariat. There are classes, a reality that sharply re-emerges from the ideological fog of interclassism during crises. And they are just as Marx defined them: those who own the means of production, and those who have nothing but their labour-power. Even eschewing demagogic visions, the juxtaposition of the accumulation of dividends on the one hand, and redundancies on the other, makes the existence of classes self-evident. But that is capitalism, and in capitalism it is always the wage earners who pay for crises, be they factory workers, technicians, or office workers. This is the case in every crisis, whether it is an economic crisis or, even more so, a military one.

A class-based response must start from this simple fact. On the trade union front, by organising a defence as best as possible. On the political front, by presenting a class perspective in opposition to the national, now Europeanist, interclassist ideologies, offering an antidote to the poisons of protectionism and social-imperialism. This already applies to trade union struggles, but it does so above all in the internationalist battle against the wars of the crisis in the world order.

Lotta Comunista, December 2024

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