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Germany produces some 5 5 million cars each year, but the German automotive industry is most likely to remember 2004 for poor sales and industrial strikes Can it be recovered.
The threats issued by the boards of global auto giants are clearly bringing down the cost of production or jobs will be cut in July, DaimlerChrysler said its workers Stuttgart whether wages will be reduced or production C-Class Mercedes will travel to South Africa.
General Motors followed in October, the announcement of a 387 million 500 million cost-cutting drive that could see 10,000 jobs slashed in its German Opel plants And this month, Volkswagen, facing its seventh consecutive drop in quarterly earnings, said its 100,000-strong workforce that costs should be reduced by 2 billion 2 of 6 billion - or 30 percent - in 2011.
In this context of job cuts threats, strikes and a patchwork of short-term labor agreements, the sustainability of the German automotive industry in a globalized economy is now under close supervision.
Automotive analysts say the automakers should have seen the warning signs of excess supply in the production of vehicles approaching German economic growth is sluggish registration, and depressed new car consumer spending down again to the fifth consecutive year.
Opel said it misjudged the market and didn t hit the brakes on production soon At Volkswagen, a decline in management saw the American and Chinese market looking to increase profits by reducing production costs in its German plants a new working agreement between VW and the IG Metall union will see wages frozen for two years in return, VW has offered its workforce, a single payment of 1000 and 1300 a guarantee of security of employment until 2011.
However, investors are now questioning whether the agreements that guarantee jobs in the future regardless of the performance of two steps forward and one step back for automakers, it will allow the industry to meet future requirements a global economy.
Jürgen Pieper of Metzler Equities in Frankfurt VW believes the agreement comes a few years late, but is nevertheless an industry breakthrough.
It is the first compromise that I think is more in favor of the company in favor of the unions, he told DW-RADIO This time they have zero percent for almost two and a half years, and what is even more important is that every new employee will have completely different conditions and wages for former employees, I think it is the first step in the right direction to make the industry more competitive.
But is it still a competitive advantage to use the skills of the German auto workers Christoph Stürmer highly qualified is the author of the recently published book Prime Power, a thorough review of the German automotive industry, he said that the costs labor must descend However, he was quick to point out that compared to other countries, the German car worker is more autonomous on the factory floor.
If you let people interact with what they do, if you listen to what they do, even the simple assembly work or on the simplest pre-assembly jobs, he explained You will find that everyone has a opinion, everyone has an idea of what they do re, and everyone has a deep understanding of what it does.
He believes there's change afoot There is growing doubt that this simple model to pay people less and using more machines can really help the auto industry survive all players are like this.
With more factory automation, labor cheaper in the new EU countries is also increasingly attractive for German carmakers Bob Hancke is an expert in European industrial relations at the London School of Economics He said the unions in Western Europe have attempted to influence workers in car factories Eastern Europe to push for higher wages, but without success.
Indeed, unions in the new EU countries know that a car plant creates large employment opportunities - even beyond the factory gates.
Take a country like Poland, which has an unemployment rate of 25 percent, he said a large car factory installs in a region - that means with suppliers, services you associate with such a plant - it probably means some 10 000 jobs, he went ten thousand jobs in an area that has an unemployment rate of 25 percent is not something that matters where no union can not pass up.
Given the cycle of conflict, wages and overproduction of strikes, that the German automotive industry has a sustainable future.
Hancke not think at the moment the German car industry has maneuvered itself into a position where cost competitiveness is the only way they can go, he said that I think that the German automotive industry will be many problems because it will be a great opportunity, given how much the automakers skills withdrew from the production process.
The enlarged EU has definitely changed the landscape they can now more easily probably the same car models in countries like Poland and the Czech Republic, and probably a few others in recent years in Eastern Europe, he added.
Christoph Stürmer says the future viability of the German automotive industry is ultimately in how manufacturers themselves as automakers such as a giant like Volkswagen may be necessary to produce less of all cars, but do more models that can attract a higher sale value, but it supports the 2004 changes show that the industry as a whole needs to renovate its strategic outlook and direction.
Many in the industry hope that this process will lead to a very thorough review of business strategies and the interaction between the management level in workers, unions and the government on how they want the automotive industry to look into the future, says Stürmer And if we see this review process, there will be a sustainable automotive industry in Germany.
But Stürmer also pointed out that some auto companies get this right over the past nine months, BMW has sold nearly 900,000 cars and surpassed DaimlerChrysler in luxury vehicles Stürmer says Audi, Porsche and BMW show car construction Germany can indeed be profitable.
These companies obviously have the capability to maintain the high level of costs below the turnover threshold, so it has been observed between the high costs they have and their income even higher, they can do quite live .
What future for the German automotive industry business, German auto industry.