Beijing in the Factory
China Shock 2.0. This means that Beijing has long since moved beyond being the world’s factory merely for T-shirts, shoes, refrigerators, or laptops. While the capital it has channelled abroad via the Silk Road exceeds $1 trillion, China has moved up the value chain to more technologically advanced and complex manufacturing. This is evident in the global battle over cars and electric vehicles, where Chinese exports have reached seven million units. The consequences of the first shocks have by no means been absorbed; the reaction to American deindustrialisation is among the forces that brought a chaotic huckster to the White House. Today, Europe is the epicentre of the second shock. Among the large corporate groups, their lobbies, and their political parties, there is a frantic flurry of activity over what to do. On the one hand, calls for protectionism are growing. On the other, companies that have put down roots in China, such as Volkswagen and the other champions of the German car industry, initially set out to produce in China for China but now produce in China for export. Other measures are a double-edged sword: there is a desire to impose a European-content requirement for production components, but this will incentivise Chinese groups to set up operations on the Old Continent. This is the path being considered by the Germans and chosen by the Franco-Italo-American group Stellantis, which is negotiating agreements with Dongfeng, Leapmotor, and BYD in France, Spain, and Italy. Some have their doubts: it is like inviting the fox into the henhouse.
Beijing in the factory, then, but also Chinese capital in Europe and European capital in China. Such an entanglement inevitably creates its own lobbies and currents of opinion, as Marxism tells us. Just as there is an American party, which is weathering the Atlantic crisis thanks to over $5 trillion in cross-investments between the two sides of the Atlantic, and just as there is a Russian party, which aims to restore with Moscow an exchange of capital, gas, and oil that has never been entirely interrupted, so it is only natural that a Chinese party should take shape. After all, this is already reflected in the politics of great-power relations. China is ambivalent about a G2 – a bipolar hegemony with the United States – precisely because it wants to avoid the image of a condominium between Beijing and Washington compromising its relations with the new powers of the Global South and with the EU.
China in the factory, certainly, and this changes nothing in the antagonism between capital and wage earners. But the proletariat must be conscious of all the interconnections and linkages of global capital, lest they be overwhelmed or ensnared by it. Marxist science is indispensable to class autonomy.
Current international tensions, which affect energy prices and supplies, are exacerbating the situation of a production system – particularly in Europe – that has long been caught up in the processes of a triple restructuring: electrification, digitalisation, and now open militarisation.
Among the many industrial sectors affected, the automotive sector is once again in the eye of the storm, and Germany remains its focal point: Germany’s leading car manufacturer, Volkswagen (VW), is consequently at the centre of the struggle.
At the end of 2024, IG Metall had signed the so-called "Christmas agreement" with VW management, which was already a heavy blow in itself: it provided for a reduction of 35,000 workers by 2030, with the aim of cutting annual production capacity by 734,000 units; to this end, some production lines would be closed, but not entire plants. Since then, there have been repeated calls from the owners, the Porsche-Piëch family, to institute a more far-reaching downsizing. And today, the closure of entire factories is back on the agenda.
In March, the Volkswagen Group announced that job cuts would rise to 30,000, adding a further 15,000 workers to those already identified across the Audi and Porsche brands and the Cariad software division. Four plants are at risk: two VW-brand facilities (Emden and Zwickau), one commercial-vehicle plant (Hanover), and an Audi plant (Neckarsulm), sites deemed by management to be "too costly".
Beyond the bare facts, two observations help illuminate what these events reveal about the times we live in.
China and arms: signs of the times
The first is the relationship with China. Volkswagen was the first European company to invest in the Asian country, bringing its own technology there. Now the main challenge to the Western car industry comes from China. The group’s CEO, Oliver Blume, warns that "China is developing its automotive industry and closing the technological gap faster than was thought possible" [Handelsblatt, March 11th].
Roles have reversed: now it is the Germans who are inviting the Chinese to invest in VW plants in Germany to fill unused production capacity. Blume himself suggested this when presenting the quarterly figures in April, writes Handelsblatt on May 21st: Thorsten Gröger, head of IG Metall in Lower Saxony and fresh from a mission to China, "does not entirely rule out the possibility".
Another sign of the times is the revival of military production, amid the automotive sector’s difficulties. The transfer of workers laid off from one sector to another is now almost openly called for. Florian Hohenwarter, since April CEO of KNDS Deutschland – a merger of the defence groups Krauss-Maffei Wegmann (German) and Nexter (French) – personifies this "evolution", having worked for almost twenty years for Mercedes. He now proposes this as a solution to the labour shortage in military production: training staff from scratch would take too long, whereas "it can be done much more quickly with an existing factory and established team, perhaps from the car industry, would be ideal; we are discussing this" [Handelsblatt, April 23rd].
European dynamics
These two trends – the reversal of the relationship with China and the potential flow of workers from the automotive to the military sector – are spilling over from Germany, across the Alps and the Rhine. From Italy, the FIOM has also sent a delegation to study Chinese car factories. It concluded that the Chinese "no longer copy our models; they have innovated and are now the ’drivers’ of change". Hence the "recipe": "We need to attract investment, or we will end up picking up crumbs, hat in hand" [Il Fatto Quotidiano, May 12th]. In addition to the cases of Germany and Hungary, the reference is to the agreement reached by Stellantis with the Chinese firm Leapmotor for an investment in Spain, a type of investment that Stellantis could replicate in Cassino and Pomigliano.
As for the defence sector, the German trend is being mirrored in France. Here too, the sector is growing rapidly: by 2026, Thales expects to hire 9,000 people, Naval Group 1,200 (plus 900 interns and apprentices), and MBDA 900. But 40% of companies report difficulties fulfilling orders due to labour shortages [Le Monde, February, 20th]. On the other hand, the automotive and components sectors are cutting back, and the idea of moving workers from one sector to another will soon gain ground.
Trade union implications
Returning to Germany, the restructuring of the automotive sector is also having repercussions within the trade union movement. Elections for works councils (Betriebsrat) took place in March. A first figure: at Volkswagen in Wolfsburg, there were 67 seats up for grabs, i.e., 6 fewer than in 2022, as the workforce has fallen by almost 7,000 to 61,300; this alone is an initial effect of the restructuring. As for the results, IG Metall remains by far the leading union, albeit losing some ground (from 86% to 75% of the vote). Here Zentrum, the list of the union close to Alternative für Deutschland, did not stand. Its influence remains concentrated above all in Eastern Germany. In the west, it retains a strong presence at Mercedes, where Zentrum originated and where it increased its seats from 7 to 9, compared to IG Metall’s 31. All in all, the "official" union has not, for the time being, suffered too much from the restructuring cycle.
The situation is quite different at the Tesla factory set up by Elon Musk in Brandenburg. Here, partly due to the management’s repeated anti-union initiatives, IG Metall has always struggled to gain a foothold. Now the united opposition list (Giga United) has won with 41.4% of the vote, ahead of IG Metall’s 31%, securing sixteen seats against thirteen. Worth noting: the emergence of a new list, Polska Inicjatywa GIGA, aimed at Polish employees (a fifth of the total), which stood with the aim of providing "a Polish voice" within the factory and secured three seats. This too is a sign of the times.
The business newspaper Handelsblatt [March 6th] offered a broader interpretation of the vote: "It is more than just an electoral defeat for IG Metall: it is the triumph of Silicon Valley’s anti-authoritarian capitalism over the German culture of Mitbestimmung", that is, co-determination. And it concludes with a scathing remark: "Years ago [Musk] said he wanted to die on Mars; we can not wish that upon him, but the important thing is this: he leaves soon".
Awareness of contradictions
The labour market reflects the contradictions of capitalism in their global dimension. On one hand, there is a growing labour shortage linked to demographic trends, which even immigration cannot fully cover. On the other, restructuring processes are laying off workers or at least threatening to do so. While the automotive sector is emblematic, it is certainly not the only one, as the Electrolux case in Italy shows, with the announcement of 1,700 redundancies. We also know that the transfer of workers from an industry with a surplus to one with a shortage is neither a linear nor an instantaneous process.
The result is a combination of two pressures: on the one hand, the demand for higher wages; on the other, the defence of jobs under threat. Overall, this remains a cycle of defensive struggles. It is in these difficult circumstances that the working class’s trade-union consciousness and, above all, political consciousness, must be strengthened.