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Last Updated: Friday, 20 June, 2003, 12:17 GMT 13:17 UK
German carmakers hit by strike
A striker at a DaimlerChrysler plant reads a union newsletter
Strikers want shorter hours, like their western counterparts
The strike over working hours ravaging industry in eastern Germany has begun to hit the country's car industry, triggering threats of reduced investment.

Production of Volkswagen's Golf at the company's main Wolfsburg plant in northern Germany could be frozen next week, VW said, if the flow of parts from eastern German suppliers continues to dry up.

DaimlerChrysler, Audi and BMW - which is shutting plants in Regensburg and Munich from Monday - have also been hit by the strike, which has already secured a promise from the steel industry to reduce the length of the working week between 2005 and 2009.

The action - called three weeks ago by German union giant IG Metall - has spread to the hundreds of firms which supply parts to the car industry, which accounts for 10% of total German industrial output and hundreds of thousands of jobs.

IG Metall wants workers in what was once East Germany to have the same 35-hour working week as their western counterparts, instead of the 38 hours they currently work.

Manufacturers say the extra three hours are needed because of lower productivity - and warn that the strike could force them to reconsider investment plans for eastern Germany.

The strikes are particularly worrying since Germany's economy is already in deep trouble, struggling for the third year in a row and facing a potential 15bn euro (10.8bn; $17.7bn) hole in the budget.

Relic of reunification

Robots welding cars at VW's Wolfsburg plant
Wolfsburg could shut down next week

Differences in working practices between Germany's two halves are particularly sensitive, since eastern German workers have often felt they have been treated as second-class citizens since reunification in 1990.

IG Metall is therefore tapping into a rich vein of discontent.

Although unemployment is high across Germany, the problem is dramatically worse in the east.

After years of under-investment while Germany was split in two during the Cold War, factories in the east tend to be less advanced and have poorer infrastructure than in the west, one factor in the lower productivity cited by manufacturers.

Some suppliers have already given up on industry-wide collective bargaining deals to strike company-level agreements with IG Metall on working hours, so as to avert the risk of job losses.

And IG Metall is thought to be ready to compromise.

But in general, neither it nor the employers seem willing to make the first move.




SEE ALSO:
Strike hits German industry
02 Jun 03  |  Business
Air chaos as France strikes
27 May 03  |  Business
Germany 'fixed' economic report
28 May 03  |  Business
Germany eyes economic upturn
26 May 03  |  Business


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