Germany’s powerful IG Metall union – which represents 3.6 million workers in the metals and engineering trades – ordered its members to begin a series of 1-day rolling work stoppages in the Baden-Wuerttemberg region. Among those affected is DaimlerChrysler AG’s Sindelfingen assembly plant, which was forced to stop production of Mercedes-Benz S-, E- and C-Class luxury cars.
DC says the work stoppages at Sindelfingen could cut daily car production at the plant by two-thirds and cost the company additional money in lost sales.
The union is standing firm on its demand for wage hikes of up to 6.5%, significantly higher than the 3.3% being offered by companies involved in the bargaining.
The union says it plans to inflict more pain on Germany’s manufacturing sector in the short term, with workers at 50 regional factories slated to conduct additional 1-day walkouts in the coming days and weeks.
IG Metall says it plans to target Porsche AG and Audi AG assembly plants. A walkout by 5,000 workers at Porsche’s Zuffenhausen plant would mark the first work stoppage there since 1984. Porsche estimates it could lose production of up to 145 cars as a result of the strikes. Audi says it could lose up to 1,000 units.
Strike actions are not being limited to auto manufacturers. The union says it also will conduct walkouts at Siemens VDO AG’s Brandenburg plant. Other automotive suppliers in the region also could be targeted for actions.
AG is expected to feel some pain as a result of the labor squabble. The company has a motorcycle production facility in the region that is on the union’s strike list. John Deere Ltd., which has a plant in Mannheim, also will lose some production.
This is the first strike IG Metall has called since 1995 and comes at a critical time for Germany’s economic and political leaders. Suedwestmetall, a group that represents 1,100 companies in the Baden-Wuerttemberg region, says a nationwide walkout of IG Metall’s members would cost the German economy €2.8 billion ($2.56 billion) in lost sales in the metals and electrical industries per day.
Germany’s political leaders are up in arms over the walkouts. German Chancellor Gerhard Schroeder faces a reelection bid in September, which could be derailed by a prolonged strike. Schroeder publicly has requested both sides to return to the bargaining table.