Metal wage round: Südwestmetall boss warns of relocation

Therefore, the collective agreement to be negotiated must allow leeway, for example, postponements or suspension of payments are conceivable in order to react to the respective operational situation. “We will also have to talk about options for individual companies to waive the payment of individual services,” said Schulz, who was CEO of the medical technology manufacturer Aesculap until the end of March.

If IG Metall overdid its wage demands, there would still be enough options for many companies in the European environment to produce more cheaply. “Take a look at the example of Ford in Saarlouis. I can only advise everyone not to take the issue of relocation lightly,” said Schulz. Ford had chosen Valencia as the location for its electric car production, in Saarlouis no more vehicles should roll off the assembly line after 2025.

When it comes to fighting inflation, Schulz relies on targeted relief instead of a funding policy with the watering can: “I expect politicians to take care of the weak in society, those who have just made ends meet and who are now threatened with existential difficulties.”

This did not include employees in the metal and electrical industry, who have an average annual income of 66,000 euros in Baden-Württemberg. “The state cannot play poker against the energy industry worldwide, it will not be able to do it financially,” said the Südwestmetall chairman.

Read the full interview here:

Mr. Schulz, you said that IG Metall is stubbornly denying reality with its eight percent demand. Isn’t it rather the case that employers don’t want to see the reality of an inflation rate of just under eight percent?
Employers also feel the price increase because it also affects companies. And that’s why I maintain that this demand ignores reality.

IG Metall says that when the last wage agreement was reached, there was a common understanding that the price development for 2022 should be looked at again in the next round. Is that not correct?
In our collective agreement, which expires in autumn, there is no retrospective clause to work through collective bargaining this year. If they do exist, I’d be happy to have IG Metall show them to me.

The union argues that it was very cautious about the Corona financial statements for 2020 and 2021 and that the table was last raised four years ago…
The end of 2021 was based on a forecast of economic development that was much more positive than reality. And even without an increase in the table, wages have increased by five percent after 2018 due to recurring one-off payments, although we are still twelve percent below the pre-crisis level of 2018 in terms of production.

>>Read here: That means the energy price shock for consumers and companies

To what extent are companies able to pass on increased energy and raw material prices to customers?
In contrast to the steel industry, in our very broad-based industry we see declining earnings for the majority of companies because they are unable to pass on all cost increases. Suppliers in particular have hardly any opportunity to impose price increases on their industrial customers, because they too have to cope with enormous price increases.

Make the economic situation of the companies aware

But companies are also making record profits. They therefore demand differentiated solutions that take operational reality into account. Aren’t you saying goodbye to the area tariff?
IG Metall and we as employers are jointly committed to collective bargaining autonomy and area collective bargaining. But we have to take note of how the economic situation of the companies is diverging. And the few companies with record profits shouldn’t distract from the fact that we have problems at a large number of operations.

What should the differentiation look like?
What you can’t do is a really big joint table raise, which would choke the struggling companies. We will also have to talk about options for individual companies to waive payment for individual services.

The order books of the metal and electrical industry are fuller than ever. You can’t really let the union strike, can you?
The order books are full because the companies are unable to process them due to a lack of parts, and new orders are falling. Of course, strikes would be bad in the current situation, but as an employer we don’t want to be open to blackmail either.

In heated collective bargaining conflicts, employers like to threaten to relocate production abroad. In view of the problems we are currently having with supply chains from abroad, nobody takes them seriously anymore, right?
The common interest that connects us with IG Metall is to preserve the industrial structure in Germany. And for that we need international competitiveness. There are still enough options for many companies in the European environment to produce more cheaply. Look at the example of Ford in Saarlouis. I can only advise everyone not to take the topic of relocation lightly.

>> Read here: Networks, political will and a lot of money – this is how German companies should create the change

Before Corona and the Ukraine war, the transformation of the industry was the big topic. Will it now be put on the back burner?
No, because the transformation has long since arrived in many companies. Old jobs are disappearing and new ones are being created. However, if you want to transfer an employee from their previous job to another location today, it is a relatively complex procedure. We have to work on that, we need more flexibility and speed. We could also encourage them in a collective agreement.

ensure energy supply

Back to inflation. The trade union also says that the currently high rates of price increases cannot be compensated for solely by means of collective bargaining policy. What do you expect from the concerted action of politics?
I expect politicians to take care of the weak in society, those who have just made ends meet and who are now threatened with existential difficulties. This does not include employees in the metal and electrical industry, who have an average annual income of 66,000 euros in Baden-Württemberg. The state cannot play poker against the energy industry worldwide, it will not be able to do it financially.

What does politics have to do to secure the energy supply?
Politicians must do everything to ensure that the lights don’t go out here, not even during the famous dark doldrums. To do this, it has to develop new sources of energy and, if necessary, keep three nuclear power plants running. However, we have not yet fully exhausted our savings potential, this applies to industry as well as to private households. And yet we must under no circumstances lose sight of the climate targets. We see that in this extremely hot and dry summer.

We have seen how dangerous energy dependence on Russia was. Are we running into a similar danger with China? The People’s Republic accounts for eleven percent of the business for machine builders, and for car manufacturers it is sometimes 40 to 50 percent.
Many companies are currently dealing intensively with the question of how they want to deal strategically with China. The industry has done good business there for decades and helped the Chinese technologically on the horse. I very much hope that everything will remain peaceful with China and that we will not end up in a situation like that with Russia. Because the effects would be even more serious.

More: Interview with IG Metall boss Jörg Hofmann – “An immediate embargo on gas, hard coal and oil would be counterproductive.”