Volkswagen challenges collective reduction of working hours at Forest-Brussels

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The rescue plan for the Volkswagen Forest-Brussels factory published in January 1999 is still under discussion in May 1999. The main obstacles are the management's challenge to the agreement on collective reductions in working hours negotiated in 1997, and the proposed reduced levels of employment. There will in any case be no new agreement before the expiry of the present collective agreement on 31 December 1999. Meanwhile, the trade unions want the new working hours to be maintained and employment to be guaranteed for all workers, temporary or permanent.

On 29 January 1999 the new German management at Volkswagen's Forest factory in Brussels submitted to the works council a new rescue plan for the car plant, which had been threatened with closure following financial losses in 1998 (BE9902263N). These losses are estimated to fall between BEF 2 billion and BEF 3 billion and would increase with the foreseen annual production shortfall of 45,000 cars. Although the management of the German-owned group has acknowledged a number of planning errors and has replaced J Ackermans, chair and managing director for 10 years, with a German managing director, it still reckons that the Belgian plant will not produce a higher output of cars in 1999 with a workforce of almost 7,000 (production workers and indirect staff) than it did two years ago with 5,500.

The plan submitted to the works council involves: the departure of 1,000 of the present 7,000 blue- and white-collar employees; the introduction of a new form of work organisation with four eight-hour shifts in a continuous production system on six days out of seven; and the imposition of stricter working rules, which include a ban on the use of personal stereos and radios during working hours, a 10-minute cut in the lunch break and a redistribution of those 10 minutes over the rest of the day.

Opposition to the plan

The new German management was hoping to finalise the new arrangements over a period of two to three weeks, but nothing has yet been achieved as the Belgian General Federation of Labour (Fédération Générale du Travail de Belgique/Algemeen Belgisch Vakverbond, FGTB/ABVV) is insisting on compliance with a legal procedure which forbids the negotiation of a new agreement before the expiry of the current one on 31 December 1999.

The plan has in any case been rejected by the three trade unions represented in the plant, as it calls into question the agreement on the reduction of working time concluded at the end of 1997 and would lead to the abolition of night-shift bonuses, which compensate workers on 32-hour weeks for wage losses and reduce the number of compensatory days off (BE9709116N). But above all, the plan allows for the dismissal not only of temporary workers recruited after the agreement, but also of permanent staff. That is the threat that has provoked the discontent of the Confederation of Christian Trade Unions (Confédération des Syndicats Chrétiens/Algemeen Christelijk Vakverbond, CSC/ACV) and the Federation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicats Libéraux de Belgique/ Algemene Centrale der Liberale Vakbonden CGSLB/ACLV), which represents mainly management staff. The unions also claim that the new working arrangements would lead to a deterioration in conditions.

In addition, the FGTB/ABVV representatives criticise the way in which the management calculates losses. According to the union, the drop in productivity is attributable to technical breakdowns and management errors. It claims that the sheet-metal workshop has been equipped with faulty, poorly programmed robots, and sheet metal from Wolfsburg in Germany has not been pressed with sufficient precision for the welding robots.

More generally, FGTB/ABVV believes that production times have been badly calculated, claiming that the need to provide for maintenance time has been overlooked when the sheet-metal workshop works 24 hours a day. In any case, according to the union, 15% more time should have been allowed for the assembly of the new Golf model. This is said to be the reason why the plant did not reach the theoretical daily production level of 1,100 cars in 1998 and did not produce more than 550 or 600 cars.

The financial justification for the "rescue plan" is also challenged, with claims that the breakdowns at Forest cannot conceal the underlying financial healthiness of the Belgian assembly plant. For about 10 years it has financed all its own investment in modernisation, worth more than FEB 10 billion, and has no debt today. Volkswagen Forest also owns 40% of the company's financial subsidiary, worth around FEB 5 billion. The Forest plant is a "screwdriver" factory dependent on suppliers, as it buys in most of the parts it uses. The low value-added/turnover ratio reflects this situation. Despite this structural fact, the Volkswagen group as a whole has been profitable since the end of the 1980s and its general situation is not bad: it made record profits in 1998 (a trading profit before tax of nearly FEB 80 billion) and its market share has increased from 14.5% to 17% in Europe.

The plan proposed for Forest is part of the Volkswagen group's strategy to become the fourth-largest car manufacturer in the world after General Motors, Ford and Chrysler-Daimler. To achieve that objective, it has chosen to reduce its manufacturing costs in terms of both fixed and variable capital by opting to increase the extent of "externalisation" and subcontracting and to concentrate production by means of introducing a continuous cycle and lengthening machine time. At the production plant level, the group has adopted a flexible organisation, but it wants to intensify work by reducing the "rest ratio" from 15% to 10% over the cycle period and by using more temporary workers.

Commentary

Negotiations at the VW Forest factory have been followed closely at other car-manufacturing plants and in the Brussels region generally. Since the closure of the Vilvoorde Renault factory in 1997 (BE9703202F), Forest is the only large industrial entity left in the region and its agreements between management and unions have always been relatively original and innovatory. For example, the 1997 agreement on the reduction of working hours carefully guaranteed workers' pay and obtained compensatory recruitment.

That is why challenging the 1997 agreement, the dismissal of temporary workers and the return to traditional methods of work organisation with continuous production would be regarded as a setback by the unions. It would be all the more discouraging for the campaign to reduce working hours on a collective basis, as at VW such a reduction had been won in a company which was not in difficulties. In Belgium, the reduction of working time is generally used only to limit job losses or as a means of extending part-time work. (Stephen Bouquin, IISA - Vrije Universiteit Brussel (VUB))