Auto assembly line
circa 1934 |
Decades
past, when
humans provided most labor on assembly lines, they unionized
and fought for higher wages. Today most labor can be provided by
fewer workers with high-tech robots. Human labor on many assembly
lines has declined in value. |
Auto assembly line
circa 2004 |
|
Volkswagen's vehicles are selling
well, but making little profit due to relatively over-priced labor. In order to continue
manufacturing, the company needed to reduce
costs to levels to make a profit at prices its
customers are willing to pay. |
| The
company wanted to negotiate a new agreement
with the IG Metall union
for a 35-hour week at the same wages in
order to cut production costs. |
| Representatives
from Volkswagen and Germany's largest industrial union
recently agreed to increase
the standard work week
at factories in western Germany by
over four hours. The
agreement increased the workers' week to 33 hours
from 29 hours. There will be no increase in pay
for the additional hours. |
| The
deal will apply to all six of
Volkswagen's western German factories.
It includes guarantees of job security for all employees at
the factories through 2011. |
|
The agreement reduces workers' wages per hour, but
guarantees them work for several years. Those workers who believe
themselves worth more per hour are free to look for other jobs. |
|
Those workers who want to increase their wages are
free to upgrade their skills, find new jobs, and change careers in order to
earn higher wages. |
|
Increasing competition from emerging economies such as
those in Asia and South America have labor adequately skilled and
willing to work for lower wages. These economies are competing well for
manufacturing jobs in industrialized nations throughout Europe and
North America. This growing competition is impacting nearly all
industries. |
|
The new manufacturing model of lower wages, more
automation, and higher quality are yielding higher wages for the
less skilled, more opportunities for the skilled, and lower costs
for better consumer products. |
|
Today's workers have the opportunity to earn
more for their skills. These same workers can purchase better
products when, after work hours, they shop in their role of consumer. |