Austerity measures and bonus cuts at Mercedes: the trade union’s reaction
Protest rallies have been announced at all the group’s factories in Germany
Labour relations in the German automotive industry remain tense. Following last Friday’s announcement by Volkswagen of a possible plan to cut 100,000 jobs (twice the initial estimates) and the union’s dismay, yesterday IG Metall rallied its members, but this time to protest against Mercedes-Benz following a letter sent in recent days in which the group announced a tightening of austerity measures (including the cancellation of a salary bonus due in July) to keep costs under control. In the background to this dispute, meanwhile, are the rumours circulating in recent weeks regarding the Stuttgart-based group’s intentions to revise its internal trade union safeguards, which effectively prevent direct redundancies in German factories until 2034.
According to a statement from IG Metall, demonstrations will take place tomorrow at the Sindelfingen and Untertürkheim (Stuttgart) plants. Actions are also planned in Rastatt, Kuppenheim, Bremen, Berlin, Hamburg, Düsseldorf, Ludwigsfelde and Germersheim, as announced by the union’s local branch in Stuttgart. The background to this, as mentioned, is the tightening of the cost-control measures planned by the group. In a letter sent to workers in Germany at the end of last week, the board stated that it is necessary to ‘continue to reduce costs as a matter of the utmost urgency’ in order to remain competitive on product prices. Consequently, around 90,000 of the approximately 108,000 employees in Germany will not, as an immediate measure and contrary to expectations, receive the special payment provided for in the collective agreement in July (amounting to up to 18.4 per cent of a month’s salary). This payment will be postponed until next year. Specifically, according to the internal memo cited by Reuters, Mercedes CEO Olaf Källenius and other senior executives informed staff that the company must reduce labour costs by increasing productivity. ‘Hourly costs must be reduced,’ the memo states. ‘In development, sales, administration and production, we should work harder for the same pay across all sectors.’ Furthermore, certain products and administrative functions will be relocated abroad, as outlined by the company, which noted that the conflict in the Middle East has driven up costs across the global industry, increasing pressure on European car manufacturers already affected by high US import tariffs.
