Audi’s Hungarian plant closed by strike in blow to economy

Unit represents 12 per cent of auto maker's revenue
|labour-reporter.com|Last Updated: 01/28/2019
Labour strike
A part of an electric engine is seen on a production line at the Audi Factory in Gyor, Hungary, in a file photo. REUTERS/Bernadett Szabo/File Photo

BUDAPEST (Reuters) — Audi’s Hungarian factory, one of the largest production plants in the Volkswagen group, shut on Thursday as workers began a one-week strike for higher wages.

A union representing more than half of the plant’s 13,000 workers said it was ready to go the full 168 hours to force a deal, adding it could prolong the stoppage or call further strikes, threatening a major contributor to Hungary’s economy.

“Work has come to a complete stop at the entire plant,” AHFSZ spokesman Tibor Szimacsek said. “We have even increased our support since our warning strike on Friday.”

The Hungarian economy has grown by more than four per cent in the last two years, and has become increasingly reliant on car manufacturers and their subcontractors.

The Hungarian Audi business makes a direct GDP contribution of about 1.4 per cent, a study by Peter Novoszath, professor at the National Public Service University, shows. The unit had 2017 net revenue was 2.34 trillion forints (US$8.3 billion), about 12.2 per cent of the carmaker’s global figure.

AHFSZ was open to continued wage talks with Audi, but has yet to receive any indication that its demands may be met, or even a meeting for continued negotiations, Szimacsek said.

Audi has offered a total 20 per cent wage increase for this year and next, but the union wants an immediate 18 per cent increase, and even more down the line to bring its workers more in line with Slovakians, who make 28 per cent more at Audi, or Poles, who earn 39 per cent more.

Spokeswoman Judit Mithay-Marko said Audi acknowledged the strike and will continue the wage talks in the hope that the strike will end before seven days.

“We trust that wage talks reach an equilibrium and we won’t have to lose an entire week’s worth of production,” she said, confirming that the factory had closed.

“Our customers will not notice the effects of the production shortfall from the shutdown.”

The government considers the strike a result of steep wage hikes in recent years, including among several automakers, Gergely Gulyas, the Prime Minister’s chief of staff, said.

Daimler, Suzuki and General Motors have units in the country, and BMW committed to building a large new factory last year.

“There is a wage competition now, which is natural,” Gulyas told a news conference. “We would be glad to see as much of the union’s demands to be met as possible.”

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