Hungarian strike forces Audi to halt production in Germany

Hungarian strike forces Audi to halt production in Germany
Audi unions stick to wage demands
By bne IntelliNews January 29, 2019

The work stoppage at Audi's Hungarian plant led to a shutdown in production in Ingolstadt on January 28, as Audi's plant in Gyor has stopped delivering engines.

The week-long strike that began on January 24 continued on Monday, as wage talks ended without a deal between the Audi union and management.

Audi has been forced to pause production at its German headquarters, as the German carmaker uses just-in-time production and its inventories are not large. A spokesperson for the company said on Monday night that production will be ceased on Wednesday as well.

The Audi Hungaria Independent Union (AHFSZ) is demanding a wage increase of at least 18%, but no less than 75,000 (€235) a month. They also want the annual threshold for non-wage benefits raised to HUF787,000 from HUF620,000. Management last proposed a wage increase on a scale "nearly the same" as an earlier offer to raise wages 20% over two years.

Unions want to close the wage gap between Hungary and Volkswagen's regional units. Salaries in Slovakia, the Czech Republic and Poland are 25%, 28% and 39% higher respectively, it says.

The union has asked the head of parent company Audi AG to take part personally in the talks with the aim of resolving the situation, union leader Tibor Szimacsek said.

Audi Hungaria's communications department said talks between union representatives and management would continue on Tuesday. Management has expressed hope that an agreement acceptable to both sides can be reached as soon as possible, the department added.

Unions say losses suffered by the company in the last four days would have provided the base for their demand. There are more than 4,500 workers taking part in the strike during shifts. AHFSZ has increased its membership during the strike, it says, and it now totals 9,300.

The government did not comment on the strike until Monday. Government spokesperson Zoltan Kovacs told Euronews that the cabinet is hoping for a compromise. Hungary has been a favourite investment destination for foreign companies because it offers the lowest corporate tax rate in Europe (9%) and attractive bonuses and cheap labour.

The emigration of skilled workers and the lack of workforce has triggered a wage increase in the last three years.

Audi Hungaria employs some 13,000 people at its base in Gyor. In 25 years, it has become the largest employer among foreign manufacturing companies. The company produced 1.97mn engines last year and turned out 105,491 vehicles in 2017 when it reported revenues of €7.14bn.