Central European economies have experienced a historically important event: after many decades of weak trade unions, Audi workers accomplished a successful strike in Győr. The stakes were high and the German company neglected to foresee the unusually high increase in demands.
It isn’t usual for workers from multinational companies to strike. This recent event is the most significant of its kind in the last three decades.
Multinational companies have always provided higher wages and security than smaller Hungarian companies and the state can. On the other hand, unemployment rates remained high after the transition; therefore, companies like Audi provided a stable and calm workplace in an uncertain economic environment. Hungary is not the only place in the region where strikes have recently flared up. Slovakian Volkswagen workers went on strike for the first time in 2017.
Audi in Győr. Via: spectator.sme.sk
Trade Unions have continuously lost their influence since the system change. Surprisingly, the biggest downfall occurred during Gyula Horn’s socialist government between 1994 and 1998. Other governments were also working against the development of the trade unions. No political party wanted strong trade unions as they could hinder the government’s actions.
Audi workers have won the battle
György Csalogány, vice-president of the Independent Trade Union of Audi Hungaria, said that “it’s a miracle that no one in Hungary has done this before.”
“Everyone is surprised because we haven’t seen a strike like this,” another employee said. The Audi in Győr has more than 13,000 workers and produces about 1.5 percent of Hungary’s GDP. The factory has been in operation since 1994 and has since become Hungary’s largest foreign investor.
The strike ended on Wednesday evening and production is scheduled to resume shortly.
Under the agreement enforced from January 1, 2019, until March 31, 2020, base pay will rise by 18 percent, at least 75,000 forints per month. Workers will also receive non-wage benefits of up to 400,000 forints in 2019 and 2020.
An integrating region, sharpening competition
Audi Hungaria employees have repeatedly stated that their goal is not to reach western wages but to catch up with Eastern Europe. A study carried out on behalf of the trade union revealed that workers at Audi Slovakia currently earn 28% more than workers at the Hungarian factory. In the Czech Republic, they earn 25% more and in Poland, that number jumps to 39%. Not to mention, the Belgian Audi offers a salary 3.6 times higher than the Audi in Győr.
Of course, the Audi HR department disputed the trade union data and, according to their official statement, the union did not use the adequate methodology and counted with incomparable elements.
According to Gábor Túry, a researcher at the Hungarian Academy of Sciences (MTA), aside from the legitimate demand for wage development needs, it is not worth comparing a car factory that specializes in part manufacturing ( the factory in Győr produces engines) to a car assembly plant that puts the parts together. This is because they work with a completely different profit margin. Macro statistics prove that the wage level differences between vehicle assembly and part production in the vehicle manufacturing industry may be up to 60-70 percent in favor of car assembly plants.
The factory shutdown in Győr also demonstrates how closely tied the production of the Central European plants is with the German parent company. Because of the strike, the Audi Ingolstadt factory was unable to produce cars.
Thanks to foreign training and replacement work, more and more Audi workers have noticed that those employed in the German and Slovakian factories are not only earning more money but are also working less. After discovering this, the Győr employees returned home and demanded better working conditions.
It’s unsure how this successful strike will affect the other multinational companies operating in the country. According to Napi.hu, employees of Robert Bosch Elektronika Kft. in Hatvan are unsatisfied with their meager salary increase. The Audi trade unions in Germany, Slovakia, Poland and the Czech Republic have also displayed solidarity with the employees of Audi Hungaria.
It wasn’t easy
There was a rumor circulating on social media that Audi might leave the country due to the protracted strikes. According to researchers at MTA, the situation is not that simple: the plant in Győr is one of the German company’s most vital strongholds. The researchers claim that “Central European sites, like other world-class companies, are competing with each other on a global level position both in terms of personality and subsidiary.”
Local headquarters receive mandates from the parent company, and if they accept a 20% wage increase, it worsens their position within the company, both at the individual and institutional level.
Management is looking out for its own interests as granting such a significant raise would give the impression that they can’t control their workforce. Alternatively, they could come across as too demanding, losing out on the factory altogether.
Some think Hungarians should be satisfied
The government didn’t voice a strong opinion about the event. Gergely Gulyás, Minister of the Prime Minister’s Office, said the wage agreement is between the company and its workers, adding that he would like the workers’ interests to be taken into consideration.
László Parragh, via: Magyar Nemzet
According to President of the Hungarian Chamber of Commerce and Industry, László Parragh, the strike is tarnishing the country’s image. He argued that the automotive industry in Germany is not in good shape and is slowing down as a result. Due to this, German trade unions are interested in persuading the company to return its production to Germany. Audi HR continuously bombarded workers with big red posters suggesting that the strike could endanger jobs providing a secure income.