VW Strike in Slovakia Exposes a European Divide
bloomberg.com
bloomberg.com
So, Slovakian workers are now realizing their current leverage, they might actually receive raises, but soon auto companies will move on. Auto co shareholders want their company's suppliers to squeeze every last penny out of every part, haggling over 0.5 cent savings is really normal.
Source: My father has been working in automotive for last 2 decades (auto parts supplier). They had an unofficial saying "EBIT macht frei", a pun on Nazis' "Arbeit macht frei", meaning that EBIT has to be optimized for at ALL cost.
EDIT: Corrected the EBIT pun
Then they actually have no (sustainable) leverage at all.
In the end, the shareholders just matter more to these companies than the employees. They're often the ones signing off on the renumeration of the CEO and the executive team.
> Then they actually have no (sustainable) leverage at all.
They kind of have. To go any lower with the wages, the car companies would have go outside of EU - to Serbia or Ukraine, for example. Then, they would be hit by the import duties they themselves lobbied for.
So the workers can ask for such increase, that is still a bit below the costs of having it behind EU borders plus duties.
The trend of the plant operators is currently exactly the other way: they try to import workers from these cheaper countries. Undocumented, of course.
Plus, this being VW, a German company, half of the board seats is held by union representatives, and a significant portion of the rest are held by local politicians (the state is a minority shareholder in VW).
I'm not sure if it is a niche large enough to be a viable business, however. In some areas, I source as much as I can from local providers - or use my own labor. However, that's probably not realistic for most folks. I'm fortunate enough to have an obscene number of acres and live next to a small family farm.
Additionally, I'd pay more for something like a Fair Trade automobile. My daily driver is a BMW. I'm pretty sure half the computer components were made by Asian children and/or an abused populous. It's one of the higher end models, nearly six figures, but I'd have happily paid something like 20% more - if it ensured the parts were sourced ethically.
German auto workers are mostly paid quite well according to collective agreements, similar to low-mid level knowledge workers. And for cars made in Europe, not that many parts are sourced from outside of Europe.
Umm...
You know what might help? Blockchains. This might actually be something that could help with. It'd be an immutable ledger of sources. It'd not be perfect, probably. But, it might help.
Of course there's quite a lot of bad behaviour happening among such a dynamic development, but I wouldn't actually worry too much about anything that goes into a car. It's almost all high tech, and really not amendable to be manufactured in sweat shops. Plus car manufacturers are large and brand-conscious, and tend to tightly control their supply chain.
Textiles are at a much higher risk of being manufactured under bad conditions, but even there I believe the race to the bottom is coming to a natural end. Over the last decade, they have moved first to China, then on to Vietnam and now, I believe, indonesia and Cambodia. They're quickly running out of countries with lax labor standards.
In 2008 they close a factory plant in Bochum (Germany) to move it to Romania, with tax reductions from the Romanian government.
In that year they received the "Company of the Year" award from the Romanian government, many Romanians were of course happy to be given the opportunity for a job, while a anti-Nokia sentiment grew in Germany with the amount of jobs being lost.
A few years later (2011) Nokia moved the same factory to Vietnam.
http://www.spiegel.de/international/business/factory-closure...
https://www.ft.com/content/619bc988-ea7a-11e0-b0f5-00144feab...
http://www.business-review.eu/news/nokia-and-romanian-trade-...
Bratislava's residents are well-off, but are within an hour of Vienna and literally across the river from Austria -- a decidedly different experience. Though the two metropoles have pursued closer integration since the opening of borders, there is still progress to be made.
Foreign ownership of firms in Slovakia, Hungary, Poland, etc. is very common, and there is an increasing undercurrent of people who are beginning to notice that since joining the EU, though their economic outlook has improved, the fortunes of the German, Dutch, and French firms that took over both struggling and thriving local businesses has improved more. These residents may look like they're envious of the German, Dutch, or French citizen, but in truth they're channelling their anger at multinational corporations.
For the common person, the most visible benefits of EU integration have been infrastructure spending from EU convergence funds (roads, railways, telecom), and the ability to take work in other EU countries to remit money. Those who stayed in their home countries -- most people -- saw their fortunes lifted slower, and in a less thriving economy, more questions like this get asked.
[1] https://www.oecd.org/cfe/regional-policy/regional-outlook-20... [2] http://ec.europa.eu/eurostat/statistics-explained/index.php/...
Also, first thing I noticed about this article. "Any Slovaks reading this are going to be very upset that they have been referred to as "east" European.
That aside, it is a rather unique situation, the country (the geographic area specifically, forgetting past borders) has a long history with the automotive sector and associated tooling and skills. During communism the region produced tanks and other vehicles for the military. After the collapse of the USSR and the dissolution from Czechia all those jobs were suddenly redundant. A lot of the older Slovaks resent the split for this reason (ignoring the general turmoil in the labor market associated with ending state owned enterprises etc.).
When car manufacturers realized they had a cheap labor market with the historical skills base they pounced, and now margins are being pushed. I have family in Slovakia, and, not to paint with a board brush, but the growing middle class is becoming more aspirational, is tends to be the case with growing middle classes.
Isn't Česká or something a used word in czech?
I'm not sure why Czechia wasn't pushed from the start. Might be worth remembering that the official name for Slovakia is actually "Slovak Republic" - so maybe their short version only caught on since people were used to the "-slovakia" part of Czechoslovakia?
How was life for them before the EU? How will it be for them when they have the "greater autonomy" the populist parties strive for?
When I hear politicians blabber about "greater autonomy" and "sovereignty" I always hear them say the words "...for me" after it in my head...
1: https://www.aktuality.sk/clanok/500481/strajk-vo-volkswagene...
2: https://translate.google.com/translate?sl=auto&tl=en&js=y&pr...
To me these people seem extremely ungrateful. I have said it before, and I know it's an unpopular opinion, but I really wouldn't cry if EU8 and their galaxy would just be left to their own devices. They don't want to feel like colonies? Fine with me, that's the door. Like us idiots in UK, they'll soon find out that life outside is not that great.
No. This is mainly payback to Germany for how we treated all other countries, especially Italy and Greece, during the financial crisis. The refugee influx is the way for everyone else to "stick the finger to Germany", as Varoufakis once said...
Germany did not show any solidarity at all with the worst-off countries, only with their banks (where, again, German banks are shareholders in, or have significant amounts of money loaned to/invested in these banks) and the arms industry. In fact, the French and German arms industries actually extorted that they be paid, or else Greece would get no cash (source: https://www.heise.de/tp/features/Griechische-Milliarden-fuer...).
> Like us idiots in UK, they'll soon find out that life outside is not that great.
You Brits are not idiots, only your government is a spineless bunch of idiots. Fix that and I believe UK will be welcomed back into the EU - although I have to admit I'm glad there won't ever be a "British exception" any more, your politicians have held the EU back for far too long.
I believe that similar effects caused the vote of the Orange as POTUS...
People like Farage would have not accepted a failed referendum and would have worked harder to influence public opinion to leave the EU. Thus leaving the EU was not a surprise decision because some voters did not show up, but based on a decade of politics.
However, the referendum was 51.9% Leave, with a turnout of 72.2%... it could have been shot down when more Remain-ers had bothered to vote.
That's political propaganda. Germany has shown a lot of solidarity in the EU over decades. Greece and Italy are not the 'worst of' countries in the EU or Europe and Germany is not responsible for much of their economic policies.
That doesn't matter, because we Germans did all our best to fuck up Italy and Greece - it began with insisting on the Dublin Agreement so that IT/GR would be stuck with the refugees while Germany could continue to live without refugees, and it continued during the financial crisis and afterwards - hell, Germany made in 2017 1.3B € by loaning money for cheap on the markets and then loaning that money for more interest to Greece (source: http://www.zeit.de/politik/deutschland/2017-07/griechenland-...)!
Fleecing a dead economy like Schäuble still does... well, I'm not surprised at all that other EU countries want to hit on Germany.
No, sorry Germany is also not responsible for the economic crisis in Italy. That's mostly homegrown. Germany is also not responsible for destabilizing the middle east and north africa. Libya was an Italian colony and in 2011 Italy took part in the military invention in Libya. Since then Libya is a failed state and many refugees/immigrants are coming via Libya. The big players were the US, Italy, France, the UK,... those did take part in the regime change, but failed to bring peace to the region. Actually the situation in Libya is worse than it was before.
Germany did not take part in these things and is not a big player in the middle east / north african politics and military interventions.
Rescuing a country is a different game than threatening "no rescue until you revert the cancellation of arms contracts", or to make 1.3B € profit off, essentially, loan sharking. If Schäuble had intended a real rescue, he would have passed on the (at some times negative!) interest rates to Greece.
> Germany is also not responsible for destabilizing the middle east and north africa
Germany is a HUGE provider of weapons of all sorts, right into the middle of conflicts. Many dictators use German (and Swiss)-owned banks to launder their illegitimate assets. Also, Germany as the leading nation in the EU has failed multiple times living up to that role. Merkel's policy has long been "don't do anything until the situation gets out of control".
Let's come back to the specific situation I mentioned: Libya. The largest weapon seller to Libya were Russia (by far) and Italy.
Not Germany. German weapon exports to Libya were minor.
The situation in Libya was neither caused nor fueled by Germany. It was Berlusconi (prime minister of Italy) who was a big friend of Gaddafi, not Merkel.
That there is chaos in Libya and that people are fleeing to Europe is nothing where Merkel or Germany in general has contributed much, compared to many other countries who were directly involved in Libya. That was contributing in a big way to the chaos there and the refugee crisis, not German policies.
Here is a nice articcle about Italy's involvement in Libya before the civil war and before the military inntervention...
http://content.time.com/time/world/article/0,8599,2053363,00...
Italians have been close to Gaddafi since the '80s - the alternative at the time was actual war, which the country did not want and could never win. The Italian plan was basically to wait for Gaddafi to die and then take that chance to promote an ordinary transition to a more presentable form of government, which would have safeguarded Italian interests and security for everyone. It's what worked for Spain, after all.
The governments who really fouled things up were France and UK, with US support behind the scene, who first recklessly promoted the "arab spring" and then attacked almost unilaterally, dragging NATO into it. Italy was involved as a token gesture; the Italian government at the time was extremely weak and nearing the end (which happened 6 months later) as Berlusconi was engulfed in more and more scandals. They had no interest whatsoever in making waves - whereas Sarkozy thought it would have ensured his re-election the following year and earned a new country for the French "sphere of influence".
Everyone in Italy knew that nothing good would come from the war, because Gaddafi was the only barrier between the country and waves of sub-saharan migrants. For years, we literally looked the other way as Gaddafi disposed of migrants in brutal concentration camps (or worse); as long as we kept paying "development aid" funds, he'd keep illegal boats to a minimum. Like Erdogan is now doing in Turkey, there is profit to be made by being the buffer zone between prosperous "cities on the hill" and starving people. And before that, Gaddafi was one of our "ins" in the world of Arab "movements", which helped mediation efforts in scenarios like Lebanon and ensured Italy was spared the worst waves of Palestinian terrorism, for example. (These policies predate Berlusconi, by the way, even though he brought them to a farcical pinnacle when he let Gaddafi camp out in Rome.) We had absolutely no upside in trying to get rid of Gaddafi, let alone doing it as rashly as the French did.
Responsibility for the Libyan clusterfuck sits squarely with Sarkozy and Cameron, with Obama right behind.
The relationship with Gaddafi was providing lots of strenge encounters. Here he was preaching Islam to Italian 'glamour girls':
http://www.telegraph.co.uk/news/worldnews/africaandindianoce...
Generally I agree that the role of the US, UK in the whole destabilization effort was way worse. Can't say much of the French role. Didn't read much about it.
Because there was no plan to replace him in the short term. He was in good health, had a relatively solid grip on power structures, and was busy realigning with NATO on the common ground of fighting Saudi-financed extremists and the Muslim Brotherhood - as exemplified by the agreement Blair struck only a few years earlier. The plan was to have the country in a better position some time down the line, letting him establish better trading links and so on. The acceleration from Sarkozy was not expected and very unwelcome.
If they leave the EU because they don't like the policies they can just as easily experience capital flight.
The colonies bit you wrote was out of place. It sounds like you're saying "either be a colony, or get out".
Calling the refusal to take in so-called refugees racist is inappropriate. I think you should do yourself the favor and delve into that subject a bit more instead of passively accepting certain ignorant narratives. The migrant crisis is a huge stain on Merkel's record, a demonstration of massive incompetence and blindness. Most migrants weren't even from Syria or affected areas. Also, note that no one seemed to notice how countries like Poland took in more than 1 million refugees from Ukraine following Russia's invasion of the country. Germany took in practically no one.
W.r.t. solidarity, Germany has a spotty record where solidarity is concerned. Consider how Germany has refused the building of Nordstream gas pipelines through central/eastern Europe from Russia, instead opting to have them run through the Baltic at greater expense. This allows Russia to cut gas supplies to central/eastern Europe without affecting Germany. Russia, as we have seen time and again, does not hesitate to use energy supplies as a tool of political pressure.
I think that while central/eastern Europe should recognize the massive changes their markets have undergone, it does not negate the other realities that are at play.
The million people you're talking about are no refugees, they are cheap labour. They're allowed to stay only as long as they keep their jobs. And they're free to go to any other country in EU.
To say that Poland's (and other central European countries) refusal to take in refugees from the Middle East is not driven by racism is to delude yourself. Some politics bluntly only agree to take in Christians. Not to mention that those countries are even willing to pay fines, just to keep these people away.
Refusal to take in refugees is not an act of non-solidarity with Germany. It's mainly a not-solidarity with Greece, Italy, Spain - countries who deal with this issue for years, and for years pledged for help.
The decision to help a few hundred thousand people in a specific situation was the right decision. Merkel did the right thing and many people are grateful for that.
The solidarity goes both ways. Transit countries had been milking the pipelines without contributing much. Poland simply has a different energy policy and different goals than Germany. The Nordstream pipeline was built and financed not by and not for the Polish energy market.
Sorry, what I meant is that if they really are so bothered about a "feel", despite the overwhelming evidence surrounding them that the feel is misplaced, then they are free to leave, so that they will find out how wrong that "feel" was.
> Most migrants weren't even from Syria or affected areas.
And? I'm originally from Italy, where massive economic migrations have been observed for a long time (mostly in transient terms - people would use Italy as a port to Northern Europe). Syria or not Syria it was already a crisis for more than 20 years, it just became more visible. The causes are long-understood, we just kept refusing to deal with them or with the outcomes. Merkel did the right thing as far as I'm concerned - regardless of Syria.
You're making it sound like these companies outsourced manufacturing to these lower cost countries against their will/interest which is obv not the case.
>> sabotaging "solidarity" policies like refugee resettlement out of pure racism and egoism.
"egoism" on a state scale basically means protecting the interests of it's citizens. isn't that what the state is supposed to be doing in the first place? just because other countries in the EU are acting in the irrational (and somewhat suicidal manner) when it comes to these things - this doesn't mean everyone has to follow suit.
No, but they did it against the interests of their existing Western workers; and such workers in many cases accepted that as a price to pay for long-term peace and prosperity on the continent. Would I prefer a world where Western workers are better off but we still have a Cold War with bombs going off here and there, the constant threat of revolutions or dictatorships and so on? No, of course not. In this sense, the Ukrainian experience is a good example of what could have been for a lot of countries without the EU.
> protecting the interests of it's citizens. isn't that what the state is supposed to be doing
There are many ways of protecting the interests of its citizens; one of them is helping people in need in other countries, in order to foster peace and prosperity in the long run. The US turning a blind eye towards the plight of Jewish refugees in the 1930s would have "protected" the interest of its citizens already in the US, but it would have been bad in the long run. The same for Italians moving there around the same time. Helping poor nations getting better, by accepting migrants (who will send back a lot of the money they earn, and reduce demographic pressure), is a good move in the long run, or even in the short run in most cases (since they pay for retirement of older EU citizens, which would otherwise be unsustainable in most cases because of declining demographics).
> irrational (and somewhat suicidal manner)
Some things look irrational in the short term but eventually make sense. A lot of our current problems are due to humanity completely losing sight of anything that is not the next fiscal quarter.
Also, I'm sure Alan Kurdi had a terrible, terrible "track record".
you saying all these stabbings, shootings, driving of vehicles into the crowd, gang rapes etc etc are made up by the press?
speaking of Sacco and Vanzetti - the government didn't do it's job and allowed violent anarchists into the country. so yes, shouldn't have let them in.
A lot of them are, especially these days when you can have nameless blogs pushing crap into facebook. Statistics are bent or misread, tales exaggerated, and then the correction is printed two weeks later on page 31 on a single line in size 7. The actual statistical risk of immigrants committing crimes is much lower than average - don't take it from me, ask people who study this stuff: https://www.cato.org/blog/immigration-crime-what-research-sa...
Of course actual terror attacks are another story, but those would likely happen anyway - you only need a tourist visa to do anything from 9/11 hijacks to renting a van.
And going back to Sacco and Vanzetti, if you think the contribution the Italian-American community made to the US over 150 years are not worth an (alleged) murder or two, I honestly think the only way of life that would satisfy you is closer to an Amish lifestyle than anything vaguely modern.
Like this right here as an example: https://en.wikipedia.org/wiki/New_Year%27s_Eve_sexual_assaul...
or this: https://www.onenewsnow.com/culture/2017/08/12/18-in-muslim-g...
or this: https://en.wikipedia.org/wiki/Rotherham_child_sexual_exploit...
etc etc ad nauseum.
>>if you think the contribution the Italian-American community made to the US over 150 years are not worth an (alleged) murder or two...
did I say "Italians" or "violent anarchists"?
>> I honestly think the only way of life that would satisfy you is closer to an Amish lifestyle than anything vaguely modern.
apparently all these "ungrateful eastern europeans" disagree :) don't know why though... I mean all this cultural enrichment at the small expense of getting raped by the thousands...
Specifically, the problems with child grooming in England are long-standing, Asians have mostly just replaced the locals (see all the stuff about Jimmy Savile, boarding schools etc). And Cologne is as much a failure of policing as a terrible event that has never happened before in Europe and will likely never happen again - so it's hardly exemplary.
And yeah, eastern europeans have a problem with racism and refuse to admit it. Which is why they will likely be left behind at some point.
as I'm sure you're aware there's no shortage of these for me to quote. literally as we speak: https://www.theguardian.com/uk-news/2017/aug/27/buckingham-p...
>> Asians
:)))
>> Cologne is as much a failure of policing as a terrible event that has never happened before in Europe
...before they let these ppl in that is
>> eastern europeans have a problem with racism and refuse to admit it
proof? maybe define 'racism' and go from there.
>> they will likely be left behind...
EU- wise - who knows. On a global scale though remains to be seen who is going to be "left behind". Tourism-wise Budapest and Prague already look much more attractive than Paris or some places in Germany.
Things like this are pretty serious and are a pretty good indication of whats to come - http://www.express.co.uk/news/world/729782/Germany-no-go-pol... Wouldn't be surprised to see US re-align more towards Central/Eastern Europe in terms of economic and military alliances going forward.
Please, read about history and geopolitics in Europe. The idea that in stable democracies created by peaceful means (Velvet revolution, Contract Sejm, Round Table Talks), 15 years after these events some dictator with bombs would materialize, were it not for EU, is simply ridiculous.
And using Ukraine as an example of what it would be like without having EU peacekeeping in other countries is even more grotesque. The events in Ukraine unfolded in the way they did due to the political games between West and Russia, including foreign-supported politicians from both sides, and gas transit extortion. EU was very involved in all of that.
1. The strike was not about money, the negotiated increase was practically same as planned by VW. It was about work conditions, for example there is no air conditioning in the work halls and in the summer there is steady trickle of ambulance cars for people who collapsed from the heat(no exaggeration). I don't know whether these demands were met, so far looks like it was whitewashed by VW corporate PR "they want money!!!".
2. I doubt cost of living in Bratislava is so much lower than Wolfsburg. Rent and restaurant food might be somewhat cheaper, but everything else are the same prices in euro.
E: And the flow of money in the EU is complicated discussion, but it's true that dividends extracted from eastern EU by western companies are several times the amount of cohesion funds flowing in the other direction.
VW would have moved their equipment right inside those buildings during the 1990s period without having to build most of the facilities in use today.
In fact the whole place took years to be rebranded (logos changed to VW).
In region like Slovakia you can get highly senior people (with decade of experience writing world class software for blue chip companies with hq in US tech hubs) for 30 or maybe 40k a year, which is considered sky high salary. Juniors might make 10, maybe 15k.
Just few hundred of kms, within same EU can make huge difference.
I am not judging the situation. Companies did use the market condition and do pay good local wages.
Nobody gets that in The Netherlands. Unless you're a freelance consultant with critical knowledge.
Yeah that sounds an awful lot like having critical knowledge. But 72k is not what an "average developer" would earn in The Netherlands, not even the average senior developer (I'd say something around 4000 per month?).
> you need to push harder if you're not getting paid this
Preaching to the choir here ;)
But maybe that's why we never heard about big software companies from Vienna then? If they have to pay average mid-career programmers 72k? ;)
Locals can get a cheap education and a nice job at either a startup or BigCo engineering office, where a salary is very high compared to local averages.
But I see most of them leaving eventually after attaining some experience to a bigger tech hub in Europe(London, Amsterdam, etc).
A big part of it may be that eastern Europeans are now effectively strangers in their own land. They have no sense of ownership or agency. During the day they work for foreign corporations, usually in low-level positions, and then in the evening they go out to spend their wages at those same foreign-owned establishments. This is definitely neoliberal colonialism, and it will not end well for everyone involved.
Maybe they didn't seem happy because Eastern Europeans don't walk around with fake smiles on their faces.
The parent comment's evidence that it's not making them happier - "The people wandering through these stores though looked dazed, alienated, and entirely out of place." (during the commenter's visit to the mall?) - is a bit sparse.
I guess the solution could be to concentrate the poor backward slavs into some kind of fenced areas where they can live their primitive lives in peace without disruption from the outside world.
He is not saying that CEE is backward. He is saying that the economic life in CEE is almost outside the control of local populations, because everything it's already controlled by western corporations.
The Senate was originally formed for exactly that purpose. It provides equal representation to every state. The House, on the other hand, has representation based on population. Bills must pass both the House and the Senate before being signed as law by the President.
Additionally, Senators were originally elected by state legislators, not the general populous. This, in addition to being equal representation, gave each state government direct influence at the federal level. This practice was ended in 1913 with the seventeenth amendment.
https://en.wikipedia.org/wiki/Seventeenth_Amendment_to_the_U...
Now, economically, there's plenty of single-workplace towns which have been devastated by companies leaving. However, any blame is typically placed directly on the company, rather than any governmental-level entities.