The GM-Magna deal

German metal workers’ union backs government in geostrategic power struggle

17 September 2009

On September 10, when the General Motors board in Detroit announced that it would proceed with the sale of Opel to a consortium consisting of the Canadian-Austrian automotive supplier Magna, the Russian bank Sberbank, and Russian auto maker GAZ, German IG Metall union officials and works council members responded with great enthusiasm.

They accept the destruction of at least 11,000 jobs at GM’s European plants and effectively support the probable closure of works in Antwerp (Belgium), Luton (Britain) and Figueruelas (Spain) as preferable to the closure of German plants.

It is now clear that the number of jobs to be slashed at the four Opel plants in Germany (Rüsselsheim, Bochum, Eisenach and Kaiserslautern) is not 2,500—as had been previously claimed—but 4,500. Even harder hit are the plants in Belgium, Britain, Spain and Poland, where a total of 6,000 jobs will be cut.

On Wednesday of this week, Klaus Franz (chair of the Central Opel Works Council and leader of the European Works Council) argued in an interview with Deutschlandfunk that the job reductions were necessary and added that he did not want to “dramatise” the situation. Asked by a somewhat surprised journalist why he did not find the destruction of more than 10,000 jobs “dramatic,” Franz replied that the alternative was bankruptcy “and that would be far worse.”

Faced with 30 percent over-capacity, he continued, Opel had to downsize. Although it was not pleasant, it was unavoidable.

Then he fired a broadside at GM’s European workers employed outside Germany, declaring they should understand that the plants in Belgium, Britain, Spain and Poland exist at all only because the German government had acted speedily in the spring and agreed to provide bridging financing of €1.5 billion. Otherwise, GM Europe would have gone the same way as GM Detroit—into bankruptcy.

Since the beginning of the Opel crisis it has become increasingly clear that the workers confront more than an aggressive management in Detroit. A key role in the attacks on Opel workers is played by the trade unions—above all the IG Metall, along with the works council delegates and the majority of shop floor representatives.

Workers face a pincer attack. The works council delegates they have elected and the union they finance with their membership dues stand unreservedly on the side of the big shareholders and the government. They work to uphold the interests of the capitalists, offering the employers job cuts, lower wages and reductions in benefits on an ever greater scale while suppressing any resistance from below.

As a prerequisite for the sale of Opel to Magna, GM is demanding written confirmation from the works council delegates that they accept sweeping concessions from the workers. “Klaus Franz quickly accepted this demand,” wrote the Berliner Zeitung last weekend. The workforce is offering to forgo €265 million annually, he said, without having asked a single worker. According to Franz, the “employees’ contribution” over the next five years amounts to wage and benefit cuts of some €1.6 billion.

In helping split GM Europe workers along national lines, impose plant closures in other countries and mass layoffs and wage cuts within Germany, the IG Metall is not only serving as an instrument of GM and Magna, it is lining up directly behind the geostrategic interests of German imperialism.

With the Magna deal, Berlin is pursuing definite foreign policy goals. Magna is allied with Russia's Sberbank and car manufacturer GAZ, the country’s largest producer of buses, trucks, trams and large diesel engines.

GAZ wants to use its plants and sales network to manufacture and market Opel cars “made in Russia” for the Russian home market. Opel is to supply technical know-how and help GAZ improve its reputation. GAZ will utilize its Nizhny Novgorod plant built in 2008 with help from Magna. The money for the partnership comes from Sberbank and thus indirectly from the Russian state.

The German government intends to intensify its cooperation with Russia through the Magna deal. It considers closer relations with Russia a critical component of its foreign policy, including its energy policy. Germany fills the largest part of its oil and natural gas needs from Russia, and the Russian natural gas giant Gazprom is involved in several German energy consortia.

While Gerhard Schröder (Social Democratic Party—SPD) was chancellor (1998-2005), economic cooperation was expanded along the Berlin-Moscow axis. Schröder then went on to take up a leading position with Gazprom, with responsibility for the building of the Baltic Sea pipeline.

The US government, which owns 60 percent of GM stock, reacted coolly when the Magna-Moscow connection became known. The US views with suspicion if not outright hostility the growing ties between Germany and Russia, which it sees as inimical to its global interests.

The GM board refused for months to approve the statement of intent which Magna had signed in the spring, and Magna rival RHJ international was seen as the preferred bidder. But the German government threw its whole political and economic weight behind Magna.

The collaboration of the IG Metall and the works councils with the German government was critical in resisting US pressure to scuttle the deal. At one point IG Metall leader Berthold Huber travelled to Moscow and met with Russian Prime Minister Vladimir Putin to press for a subsidy from Moscow to the new Magna-controlled Opel. “I do not have any doubts that Magna with its Russian partners will receive the subsidy,” he said afterwards to the German press agency DPA.

When the GM board gave way last week and renewed its talks with Magna, sections of the American media reacted furiously. Germany’s foreign policy orientation was “as clear as mud,” declared an op-ed piece in the New York Times.

The column criticized “Germany’s increasingly ambiguous relations with Russia” and concentrated its fire on Berlin’s vehement backing for Magna, complaining that the result would be increased competition from GAZ for GM’s three Russian assembly plants. The column quoted an unnamed American official as saying, “I think in general we’ve come to the point where the Germans feel they can take the United States for granted, and do.”

Other articles stressed that a stabilization of the transatlantic axis had been expected from Chancellor Angela Merkel (Christian Democratic Union—CDU), but the opposite was taking place.

The grand coalition government in Berlin, comprising the CDU and the SPD, is reacting to the international economic crisis with a more aggressive assertion of German national interests. Although the German chancellery and the foreign ministry shrink from an open conflict with Washington, they see the crisis as an opportunity to begin to challenge the supremacy of the US.

Under these conditions, the unions adopt an increasingly strident nationalist orientation and move ever closer to the state, in order to promote Berlin’s geostrategic aims. Thus, works council leader Franz is threatening the US with resistance at all Opel plants if the GM board decides against Magna.

Workers must reject being dragooned into support for German great power politics. They cannot allow themselves to become the cat’s paw of imperialist interests.

It is possible to defend all jobs at all locations only if a rebellion is prepared against the policies of the unions and works councils.

Factory committees, independent of the unions, must be formed to establish contact with other factories and workforces and organize a common struggle of all European GM workers against plant closures, layoffs and wage cuts. This should be extended to embrace GM workers in the US, Canada, Mexico and other countries.

The defence of jobs must be made the starting point of a political offensive with the aim of establishing a workers’ government. Such a government would expropriate the banks and large corporations, subordinating them to democratic control and placing them in the service of the whole of society.

Ulrich Rippert

Ulrich Rippert