German unions are fighting to defend the 35-hour week

Workers at a Mercedes-Benz factory in Marienfelde, Berlin, were visibly frustrated. Over a hundred of them, clad in black uniforms and wearing red union T-shirts, shouted slogans against the company's chief, Ola Källenius, and demanded the preservation of the 35-hour workweek. The trade union, IG Metall, chaired by Yasmin Fahimi, emphasized that 35 hours was "a red line" for them.

Constantin Borchelt, head of the Berlin branch of IG Metall, brought out a red vest with the number 35 and a smiling sun to show solidarity with the workers during a crucial seven-week strike in 1984 that successfully reduced the workweek from 40 to 35 hours.

The German union, IG Metall, representing 2.2 million members across various industries, had called for a nationwide "day of action" on September 21st to support car-industry workers. Demonstrations took place at major car manufacturing sites like Volkswagen's headquarters in Wolfsburg, Mercedes-Benz's home base in Stuttgart, and Audi's facilities in Ingolstadt. With over 175,000 participants, these rallies aimed at defending the 35-hour week, a 5% pay increase, and assurances that jobs and factories would remain secure.

However, regional employers' association Südwestmetall expressed shock at these demands. Talks about wages are scheduled to commence on October 7th, with strikes potentially starting as early as November 1st. Industry analysts predict that autumn 2023 will be a challenging period.

On the employers' side, Mercedes-Benz is pushing to dismantle the 35-hour week, which is negotiated separately. Ferdinand Dudenhöffer, director of the Centre for Automotive Research, predicts that if one carmaker removes the 35-hour week, others are likely to follow. The luxury automaker is threatening to close two German factories unless workers accept harsh conditions, such as extending the workweek to 40 hours without additional pay and reconsidering perks like bonus pay for Christmas and holidays.

Mercedes claims that "producing cars in Germany is no longer economically viable," citing higher labor costs compared to other European countries and the growing competition from Chinese manufacturers, both in terms of price and quality.

Mercedes sales in China have plummeted by 27% and profits dropped by 50% over the last three years. Domestic carmakers now hold a 70% market share in China, up from 50% five years ago. Meanwhile, Mercedes's wage gap with Hungarian workers has widened, with hourly pay at a Hungarian plant being around €15.60 compared to €49.50 in Germany. This year, Mercedes doubled its production capacity at its Kecskemet plant to 400,000 cars annually, making it larger than any of its German plants.

Union leaders argue that the management's cost-cutting proposals are "a horror catalogue." They propose reducing the workweek to 30 hours, which could preserve jobs and capacity without significantly impacting wages. Despite their resistance, the two sides seem poised to negotiate in good faith, but the long-term outlook for Germany's car industry is bleak.

According to Dudenhöffer, the number of people employed in car manufacturing has plummeted from 830,000 in 2018 to 700,000 today and is projected to decline to 500,000 by 2030. This decline threatens the legacy of Germany's once-proud car industry.