VW Workers in Germany

[Sonic dB]

Interesting article about Volkswagon workers in Germany.
The union recently agreed to "up" their work week to 33 hours per week. Predictibly, the workers are not happy about it.

They had been working a 28 hour week, at $69 per hour (getting paid for full week). That works out to over $100K per year, for 28 hours a week to assemble these cars.

http://online.wsj.com/public/article/SB116794740942867459-0OuCuD2wyuBo_vlO1o0z4m_fGK4_20080104.html?mod=rss_ free

VW's 28-Hour Workweek
Goes Kaputt in Wolfsburg
By STEPHEN POWER and ALMUT SCHOENFELD
January 5, 2007; Page B1

WOLFSBURG, Germany -- Time moves slowly in the town Hitler built to churn out his "people's car."

The giant Volkswagen AG factory here still bears the shrapnel scars from World War II bombs and still makes small cars -- but now it takes the company twice as many hours as its competitors to build them, roughly 50 hours for one compact.

At the same time, Volkswagen workers like Ronald Wachendorf, a 50-year-old mechanic, have enjoyed the shortest work week in the global auto industry: 28.8 hours, pulling down a full week's pay while working a day less than the 40-hour norm at General Motors Corp. and even less than the 35-hour standard at other German car makers.


VW's Wolfsburg employees will work more hours.
The extra time off from work has given Mr. Wachendorf ample time for simple pleasures: taking his 10-year-old daughter to soccer practice, playing chess with her after school, reading books about his diverse interests: philosophy, Henry Ford and the development of the German railroad.

But now, Mr. Wachendorf is having to adjust to a more hectic schedule -- at least by Volkswagen standards. In September, Mr. Wachendorf's union agreed to extend working hours at the company's German plants by more than four hours a week, to 33 hours, after the auto maker threatened to shift production outside the country. Volkswagen won't pay the workers extra to compensate for their longer schedule. On an hourly basis, the workers' wages will fall more than 14%.

"We all knew something like this would come," says Mr. Wachendorf. "The general mood among my colleagues is not good."

The change under way at Volkswagen reflects a broader trend in Europe's largest economy. With unemployment running around 10%, companies have more leverage to demand sacrifices of workers. Increasingly, businesses are pressuring employees to work longer for the same amount of money and threatening to shift production abroad.

In a country that is home to the world's best-paid auto workers, Volkswagen goes even further -- paying $69 an hour, compared with the national average of $44 and the U.S. standard of $34. Because of its reluctance to cut jobs, Volkswagen employs thousands of workers to make seat covers, exhaust systems and steering gears -- work most auto makers outsource.

With low-cost Asian rivals making inroads in Europe, Volkswagen is having to implement painful cost cuts. Over the next three years, the company is trying to shed up to 20,000 jobs -- mostly in Germany and mostly assembling cars -- by offering large severance packages to encourage workers to leave.

Despite that, the company's shift to longer hours remains hard to swallow.

"It is a pity for family life," says Sandra North, 34, a mother of two whose boyfriend works for Volkswagen. She works in one of the company's cafeterias. Ms. North says short work schedules allow more time for family activities, such as taking the children for pony rides at a stable near their home. Yet Ms. North says she also understands why her employer can no longer afford to be so generous.

"If you look at other companies around, they have always worked much more -- 38 to 40 hours," she says.

Volkswagen isn't like most companies. Its second-biggest shareholder is its home state of Lower Saxony, which has an interest in protecting jobs. More than half the seats on the company's board belong to German politicians and labor representatives, in keeping with a German law that requires big corporations to give workers a voice in governance.

Within Germany, few towns depend as much on Volkswagen as Wolfsburg, a community of 123,000 surrounded by farmland. The red-brick Volkswagen complex here covers an area the size of Monaco and accounts for more than half the town's jobs. Local streets carry the names of former Volkswagen executives.

Yet sympathy for Volkswagen workers runs only so deep. At the Tunnelschänke, a popular VW watering hole decorated with little plastic VW Beetles, bartender Carmen Stumpf shrugs as she listens to workers grouse about their new schedule.

"They don't see their situation in relation to others," says Ms. Stumpf. Wolfsburg's mayor, Rolf Schnellecke, agrees. "It was not a very just situation" that Volkswagen employees "worked four days a week and still wound up getting more money" than "normal people" in the town, Mr. Schnellecke says.


Volkswagen's short work week began in 1994. Rather than cut 20,000 surplus jobs during an economic downturn, the company shaved its work week by roughly 20%, which if it didn't trim wages and benefits, at least cut down on the cost of building cars no one wanted to buy.

The change wasn't easy for some. Ms. North's boyfriend, Thomas Jung, a 43-year-old VW factory worker, says he initially hung out in bars and played videogames. "I preferred going to work....One feels superfluous when one is needed less," he says. Gradually, though, he began going to a gym three or four times a week, and took vacations in Spain, Portugal or the Dominican Republic "at least once a year for two weeks."

After he and Ms. North began living together, he assumed other duties -- buying groceries for the weekend, picking up her children from school on his day off, making them lunch, and helping them with their homework.

"I really enjoy spending time and playing with the children," Mr. Jung says.

The good times stopped rolling in 2004, after disappointing sales of the company's flagship Golf model dropped the Wolfsburg plant into the red. Last June, the head of the company's core VW brand, addressed thousands of Wolfsburg factory workers. The company, he said, could no longer afford to pay them such high wages for such short schedules.

After months of negotiations, Volkswagen's German labor representatives agreed to extend working hours to 33 a week -- but not without extracting a promise from Volkswagen management to continue building the Golf in Wolfsburg.

The deal means thousands of VW workers are again having to adjust their schedules. Mr. Jung is cutting back his gym visits, and Ms. North has hired a baby sitter for an extra day since Mr. Jung can't pick up the children from school on Fridays now.

But the most dramatic ripple effects are outside Germany. To boost Wolfsburg's productivity, Volkswagen plans to shift some Golf production there from a factory near Brussels -- a move that has outraged Belgium's government and which is expected to result in numerous job losses there.

A Volkswagen spokesman says the company "is aware of its responsibility for" the 4,900 workers in Brussels and "will develop a socially responsible settlement." The auto maker has proposed building a new Audi model at the Brussels plant, a step that could significantly mitigate the number of job losses there.

Mr. Wachendorf, the mechanic, puts matters more bluntly. "That's part of the contract, that [VW managers] supply more [Golfs] for us," he says. "It's their problem where they get the cars from."

[k9handler]

yeah that does seem to piss them off!

[on2wheels52]

No doubt there are other COLA factors involved but the hourly wage jobs in my past seem pale in comparison. I would hope they don't complain too much.
Jim

[tabs]

And one wonders why Europeans are worthless pieces of *****. They are nothing like the Iron men of yester year...maybe all the good ones died in the last war..and all that were left to continue the gene pool were the slackers...and communists.

[azasadny]

Bring the Germans to Detroit and let them see their future (closed factories, outsourced jobs, huge buyouts and layoffs).

[sammyg2]

Oh, now I remember why I don't like unions.

[Jim727]

Originally posted by tabs
And one wonders why Europeans are worthless pieces of *****.

That is an INCREDIBLY stupid statement.

[svandamme]

Originally posted by tabs
And one wonders why Europeans are worthless pieces of *****. They are nothing like the Iron men of yester year...maybe all the good ones died in the last war..and all that were left to continue the gene pool were the slackers...and communists.

Tabs in full effect...took him 5 days to sleep off his New Years Eve hangover, and from the looks of it, he can use another 5 days or more...

btw, Tabs, we are so worthless, but our Euro ain't... gonna pay oil in euro's soon... and that's going to make the greenbacks in yer pocket...worthless...

LOL at yer Avatar too... a little boy... very appropriate...

[Sonic dB]

I wonder what Porsche pays its people + hours that they put in.?

[k9handler]

living in europe I sure don't like the euro or gas/oil prices...so maybe the VW guys can use some extra hours and pay to stay warm and keep the cars on the road.

As for Tabs...not worth the effort!

[Grady Clay]

Let’s see, PAG is buying VW stock (leading to a takeover to private?) with the burden of paying a union labor force about double its worth.

The only way this makes sense is if PAG can bust the VW union. Can that be done?

Best,
Grady

[svandamme]

this week VW announced record sales for the last year...
guess they aren't doing to bad after all...

Volkswagen brand announces record deliveries for 2006





The Volkswagen Passenger Cars brand sold more vehicles last year than ever before in the history of the company. A total of 3.395 million vehicles were delivered to customers worldwide in 2006, representing a 10.0 percent increase on the previous year. “Growth was noticeably stronger for the Volkswagen brand than for the world market in 2006. Key markets recorded quite significant growth in some cases. With these record figures, Volkswagen has strengthened its position as one of world’s largest automakers,” Dr. Wolfgang Bernhard, chairman of the Volkswagen brand board of management, commented in Wolfsburg.

Volkswagen Group delivers record 5.73 million vehicles in 2006

All brands and major regions with higher sales



In 2006, the Volkswagen Group delivered more vehicles to customers than ever before. The Group sold 5.73 million vehicles worldwide, corresponding to a rise of 9.3 percent compared with the previous year. “There was a marked increase in Group deliveries in all major regions. All brands contributed to this record”, Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen AG, commented in Detroit on Sunday. “I would like to thank everyone involved for this outstanding achievement. Above all, my thanks go to our customers, who once again showed great confidence in Volkswagen Group products last year.”

5.73 millions cars, 9.3% more then in 2005
how does that related to any of the American car producers?

just had a quick look at the 06Q3 reports ( Q4 isn't out yet)
seems like they are discussing .... profits...?

January – September 2006 Key Points
• Increase in Volkswagen Group operating profit before special items of 62.0% year-onyear
to €3.0 billion, but still below our medium-term Group target
• Negative one-off effects mainly from restructuring expenses and positive one-off factors
from the sale of equity investments reduced Automotive Division operating profit by a net
€1.7 billion
• At €628 million, Automotive Division operating profit after special items 43.9% lower than
in previous year; Financial Services operating profit remains at high prior-year level
• Special items reduced consolidated pre-tax profit from continuing operations by 7.1% to
€937 million year-on-year
• Consolidated profit after tax rises 76.6% year-on-year to €1.2 billion (previous year: €0.7
billion), even with an above-average tax rate for continuing activities due to substantial
special items
• Ratio of investments in property, plant and equipment (capex) to sales revenue in the
Automotive Division at 3.1% (previous year: 4.4%)
• At €8.2 billion, net liquidity in the Automotive Division remains at a high level
• New model initiative successfully continued

i'm no financial analyst, if anybody is , please have a look on their website and give us the low down, but it looks to me they are using black markers in their accounting books.. they do seem to be making profit
perhaps less then investors would like, but still , a profit... how much profit do they make in Detroit these days? GM? Ford?

[artplumber]

Observations:
Stijn,
Obviously, VW is not happy with it's economic outlook, otherwise the workers wouldn't be asked to take an increase in hours without a pay hike.

The entire article actually indicates that VW initially chose to decrease the work hours to keep from firing employees IIRC. Now, everyone has gotten accustomed to it, and are resisting returning to higher #'s of hours, so the union didn't negotiate the wonderful hours, the company tried to maintain it's workforce - let's see the US big 3 do that.

Finally, some people are hell-bent on buying German, because of yesteryear when; you want it = VW and you made it = Mercedez for the sedan/Pcar for the sportscar. This is changing. Obviously, if you choose to pay a $3000 premium for a german car of any kind, then you are helping those workers out.

[svandamme]

Originally posted by artplumber
Observations:
Stijn,
Obviously, VW is not happy with it's economic outlook, otherwise the workers wouldn't be asked to take an increase in hours without a pay hike.

i'm not denying that, i'm simply refuting some of the earlier claims that us Europeans should look at Detroit because we're on the same path... which it would seem is not the case looking at VAG's numbers...

sure VW is not happy with it's outlook, they have investors to please and CEO's pockets to fill, it's never "enough" now is it

but they aren't doing to bad considering what GM and Ford are doing..that's the only point i'm making, and that point set's Tabs rant straight

[Superman]

Writers that report part of the story but not the whole story, so as to create a wildly skewed picture that causes maximum emotional reaction from their readers.......do not impress me. Here, the "rest of the story" is starting to come out. The neocon union-haters will become less interested in this subject as the truth comes out and the question change from simple (partical truths and sound bites) to complex (reality).

VW is doing fine. With workers making 100K on 28-hour weeks. Ford and Chevy are going in the tank with workers making less than that, working 40+ hours per week. So then, maybe it's not entirely the fault of the unions and their despicable, lazy, worthless members who assemble cars.

And, VW seems to have been using this work week thing as a way to avoid layoffs. Ford and Chevy most certainly wouldn't be interested in observing any level of social responsibility. Ergo, their place in the market.......WAY behind the German auto makers.

I would be interested to see what publication that first article was published in. Neocon News?

[svandamme]

Originally posted by Superman

And, VW seems to have been using this work week thing as a way to avoid layoffs.

ultimately VW had to layoff people too, they've done so recently across Europe... and the Unions here are putting up a fight as well, difference is scale... here the Unions are devided across the individual member states in the EU, biggest in Germany, and strongest there as well compared to other EU states...

the smaller workweek compromise was not VW's idea.. trust me on that one.

[gduke]

Speaking of unionization, a friend of mine is a plant supervisor and he told me that he lost a welder who went to work for a cereal company that paid him $8/hr more to put the prizes in captain crunch.

We often hear talk of how many jobs are lost and factories are being closed in Detroit while Toyota builds plants and expands it'e US workforce. What is the problem in Detroit? It sounds like a US problem, not a European/German problem to me, eventhough German automakers and Detroit face some of the same issues, people are still buying VW's.

Gary

[turbo6bar]

VW has most certainly been laying off employees. They recently gave $300 million EURO to buy out 1800 employees at a plant in Belgium.

Part of VW's sales success has been due to healthy growth in the Chinese market.

[Sonic dB]

some good arguments and points made here

[artplumber]

Originally posted by svandamme
...

the smaller workweek compromise was not VW's idea.. trust me on that one.

Fair enough. I'm just referring to this paragraph:

Volkswagen's short work week began in 1994. Rather than cut 20,000 surplus jobs during an economic downturn, the company shaved its work week by roughly 20%, which if it didn't trim wages and benefits, at least cut down on the cost of building cars no one wanted to buy