As the German economy is expected to contract by 0.2% this year, Volkswagen plans mass layoffs and shutdown of at least three companies in Germany. In the wake of this news, while Volkswagen Group's roughly 300,000 staff in Germany face uncertainty, Mercedes and Audi's workers took out rallies in Berlin and Ingolstadt respectively to demand higher wages.
Protesters at the rally by the employees of German car maker Mercedes demanding higher wages, at a Mercedes plant in Berlin, Germany, October 29, 2024. This comes at a time when Volkswagen plans to lay off tens of thousands of staff and shrink its remaining plants in Europe's biggest economy.
One of the banners read "170 euros more for trainees!" at the rally in Berlin. While the workers demand higher wages, the German Chamber of Commerce and Industry reported that the German economy would contract by 0.2% this year.
The Mercedes workers have demanded a 7% hike. A sign held by a man at the rally in Berlin reads, "Together for 7%". Meanwhile, Volkswagen has been negotiating for weeks with unions to lower costs.
"Management is absolutely serious about all this. This is not saber-rattling in the collective bargaining round," Daniela Cavallo, Volkswagen's works council head, told several hundreds of employees at the carmaker's biggest plant, in Wolfsburg, on Monday.
The German Chamber of Commerce and Industry (DIHK) expects zero growth in GDP in 2025 as well.
"We are not just dealing with a cyclical, but a stubborn structural crisis in Germany," DIHK managing director Martin Wansleben said during the presentation of its economic survey for autumn 2024.
The economic survey, conducted among 25,000 companies from all sectors and regions, shows that 31% expect the business situation to worse, up from 26% in the last survey. Only 13% of the companies expect an improvement.
"We are greatly concerned about how much Germany is becoming an economic burden for Europe and can no longer fulfil its role as an economic workhorse," DIHK managing director Martin Wansleben said.
Christiane Benner, head of IG Metall, speaks during a protest of trainees and employees of German carmaker Audi demanding higher wages in front of the company's headquarters in Ingolstadt, Germany, October 29, 2024.
Trainees and employees of German carmaker Audi demand higher wages during a protest march in front of the company's headquarters in Ingolstadt, Germany, October 29, 2024. Meanwhile, the economic survey for autumn 2024 shows that a third of companies plan to reduce their investments in Germany. In the industry, it is even 40%.
Echoing the protest in Berlin, the Audi workers demand a raise of 170 euros as well. "Not 112 but 170," read some of the signs held by the protestors in Ingolstadt.
Beyond geopolitical problems, companies are worried about the location conditions in Germany. The survey showed that 57% of the companies see uncertain economic policy framework conditions as a risk, followed by labour costs with 54% of the companies and shortage of skilled workers with 57% of the companies surveyed.