Car industry disputes, 2005

Update on Car Industry: More strikes

Following a short update with news from the global car industry, serving as background information to the articles on the automobile sector in Iran and India in this newsletter. The car industry is still the most ‘globalised’ sector and therefore an indicator of the general condition of global capitalism. At the moment we can observe an acceleration of the crisis and of the global shift of the automobile industrial centers. Two of the biggest companies of the USA and representatives of a whole area of industrialisation, GM and Ford (and its suppliers Delphi and Visteon), are on the verge of formal bancruptcy and consequently announced mass redundancies and even factory closures. The Business Week from the 25th of July 2005 deals with the emergence of a new ‘Detroit’ in Eastern Europe and Asia, stating that: “The full impact of Detroit East’s manufacturing muscle will hit Western Europe around 2008. That’s when the plants will reach peak capacity, flooding the Western market with cars that enjoy a newfound pricing advantage. The surge will occur just as Chinese imports start to accelerate. The combined effect on prices will make it increasingly difficult for laggards like Fiat, Opel, and Volkswagen to maintain expensive, excess capacity in the West, and may well force auto makers to shut down Western factories.” We can already see the prelude of this process:
23th of July: Ford announces to sack 30 per cent of its staff in the US (10,500 workers).
26th of July: Daimler Crysler wants to reduce its German workforce by 5,000.
23rd of August: Volvo wants to dismiss 1,500 people.
29th of August: SEAT declares to cut its workforce by 15 per cent.
10th of October: Delphi, the supplier of General Motors, declares to be insolvent; currently 185,000 people are employed by Delphi worldwide, in the USA about 8,500 are supposed to lose their jobs this year, 25 plants are planned to be shut down, the remaining workers face severe wage cuts.
It will have to be seen in the future what the reactions of the workers will be and if the ‘defensive’ struggles in the West might come together with struggles of a new workforce in the car factories in the developing East. For example Hyundai announced at the end of September to invest 1 billion Euros in a new car plant in the Czech Republic and while Ford cuts jobs in the USA it hires new workers in Russia (see below). So far capitalism can’t rely on any other sector which would replace the automobile industry and its importance for the economy. During the last months there have been various struggles worth mentioning:

Threatened strike at Ford in Russia
On 30th of September Ford workers in Russia threatened to strike if management refuses to increase wages by 30 percent and offer other concessions. The workers demands come as the firm is planning to almost double production at its St. Petersburg plant, putting additional pressure on its work force, the union official said. While Ford plans to add to its workforce of 1,700, the production boost will nevertheless add pressure to workers who already do overtime in the hope of a bigger paycheck. Most of the plant’s workers earn between 10,000 rubles (350 US-Dollars) and 17,000 rubles (600 US-Dollars) per month. In comparison, Ford workers in Brazil earn between 560 and 910 US-Dollars per month as well as receiving 1 percent of the profit a plant makes. Recent discontent over terms and conditions has led to a dramatic increase in union members, with membership rocketing to more than 1,100 from just 112 in August. [http://www.moscowtimes.ru/stories/2005/09/30/042.html]

Strike at VW in Brazil surprises the official unions
On 31st of September a general assembly of 8,500 VW workers in São Bernardo decided to go on strike against the official recommendations of the union. They were joined by another 3,000 workers of the late shift. The unions reacted by telling the workers to go home and come back to work at the 3rd of October. In a statement, the automaker accused the São Bernardo do Campo union of being out of control. Plants at Taubaté and Curitiba were affected due to missing car parts from São Bernardo. Workers at the other plants joined the strike on the 4th of October. For the first time all VW plants in Brazil came to a standstill, 18,000 workers walked out. At São Bernardo the strikers were joined by landless people who occupied land owned by VW. On the 18th of July hundreds of workers occupied an area of 42 acre in size. By October up to 7000 persons - including about 2000 children, were in the camp.
The strike at Taubaté ended after about one week when workers accepted a VW offer to pay 5,000 Real (2,125 US-Dollar) per worker subject to an agreed production volume being reached in 2005. Workers originally asked for 5,500 Real profit share per employee, while VW countered with 4,700 Real. In early October VW said it had now lost 12,000 cars and 9,000 engines because of the strike. On the 24th of October the São Bernardo workers finished their strike. The 12,400 workers at the oldest and largest VW factory in Brazil returned to the assembly line though they had not signed an agreement with the automaker.
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Spontaneous strike at VW in Bruxelles/Belgium
On the 17th of October workers at the VW plant laid down their tools spontaneously in response to the governmental plans to raise the age for entering retirement from 55 to 58 years. Their action happened in the aftermath of two one-day general strikes in the country. [http://auto-motor-und-sport.de]

Indian rulers want to enforce anti-strike law against car workers
On the 25th of October the high court in Bangalore, location of Toyota and other automobile plants, upheld three notifications issued by the government declaring automobile and auto component industries as a public utility service under the provisions of the Industrial Act. Justice R. Gururajan observed that the wheels of industry have to keep moving in the larger interest of the economy and upheld the notifications. It is implied that workmen in public utility service cannot go on strikes and lockouts.

Strike at SEAT in Spain against redundancies
On the 10th of November all three SEAT plants (Barcelona, Martorell and Pamplona) were on strike against the announced cuts of 1,350 jobs. Already earlier in October a strike of lorry drivers stopped production at Spanish plants of Citroen and Daimler Chrysler. [http://www.rp-online.de]

[prol-position news #4, 12/2005] http://www.prol-position.net/nl/2005/04/car_up