Temporary workers at the FAW-VW joint venture in China demand equal pay and get criminalized while elsewhere VW workers’ struggles erupt – by Ralf Ruckus
FAW-VW workers employed through temporary agencies in Changchun, northeastern China, have been involved in a struggle for equal pay since late 2016. FAW-VW was established in 1991 as a joint venture co-owned by the Chinese state enterprise FAW and German car makers Volkswagen (VW) and Audi. Apart from Changchun (Jilin), it runs factories in Chengdu (Sichuan), Dalian (Liaoning) and Foshan (Guangdong). It employs more than 50.000 workers and produces passenger cars and car components.1
Struggle of temporary workers at FAW-VW in Changchun
The temporary workers – many of them working at FAW-VW for years – demand that the joint venture hires them as direct employees immediately, that it acknowledges how long they have worked there, and that they get compensated for the past unequal pay. They do the same work but earn roughly half of what workers directly employed by FAW-VW get (for example, 60,000 yuan vs. 120,000 annually) and don’t receive any of the latter’s benefits. In their statements, the temporary workers call this a breach of China’s Labor Contract Law, namely article 63 (equal pay for equal work) and article 66 (agency workers should just fill ‘provisional, auxiliary or substitutive positions’). Besides, some of the temporary agencies are directly linked to (and possibly owned by) FAW-VW, a breach of article 67 of the Labor Contract Law (companies are not permitted to establish their own temporary agencies to employ workers).2 On top of that, VW has even committed itself to equal pay in the “Charter on Temporary Work for the Volkswagen Group.”3
The new regulations for temporary agency work were implemented in China in 2013 as part of amendments to the Labor Contract Law, but with a three-year transitional period that expired in 2016. Temporary workers at FAW-VW were aware of that and acted accordingly. They made their demands through China’s sole official union ACFTU in November 2016, but seven collective bargaining sessions with FAW-VW and temporary agencies failed. When workers filed a case at local courts it was rejected. Several demonstrations between February and May this year did not lead to any solution, either.4 On May 26, 2017, the workers’ representatives Fu Tianbo, Wang Shuai and Ai Zhenyu were arrested for “gathering crowds to disrupt social order,” a standard accusation used by the CCP regime to quell social unrest. While Wang and Ai were released soon after, Fu was officially charged in early June and has remained in custody since.5
Workers supporting Fu have tried to get him out by writing open letters to the authorities, i.e., in August to the local Public Security Bureau (the police administration responsible for Fu’s detention) and in September to the Communist Party’s anti-graft Central Leading Group for Inspection Work.6 They also wrote letters to the German VW headquarters, the German works council and others to ask for their intervention.7 On August 25, two heads of VW’s European and global works councils from the German metal workers’ union IG Metall sent a return letter telling the workers in China that they would “take the case very serious” and then asking them to report the case to Volkswagen or the Chinese local authorities.8 In other words, they ask the temporary workers in China to call on their opponents in the labor dispute and those who arrested their representative for support. The Chinese temporary workers who posted the German works councilors’ reply letter online commented appropriately: “The Germans don’t care. So it’s on us to fight!”9
FAW-VW’s apparent breach not only of Chinese labor law but also of VW’s own commitment to equal pay is in line with the general practice in China. Many Chinese and foreign companies openly break the labor law, e.g., by forcing workers to work extended overtime and by paying less than the official minimum wage. Furthermore, VW seems to continue a tradition of collaborating with authoritarian regimes and their repression of social resistance. VW’s collaboration with the Brazilian dictatorship in the 1970s, the passing on of information on the political orientation of workers to the repressive organs and the toleration of subsequent arrests, was a hot topic in German media this summer.10
More VW worker mobilizations in Europe
Meanwhile, in Europe VW has had to deal with more worker mobilizations and strikes in recent months. In June, VW workers in Bratislava, Slovakia, won a 14.1 percent wage increase after staging the first strike in that plant since the collapse of socialist rule in 1989.11
In early August, after conflicts around VW’s decision to extend weekend work, workers in the VW plant in Poznań, Poland, left the union Solidarity (Solidarność) in protest and established a new self-organized section within the base union Workers’ Initiative (Inicjatywa Pracownicza). After VW sacked several workers involved in this for alleged defamation of the company, 2,000 workers signed a petition for their reinstatement in early September.12
At the end of August, VW workers in Palmela, close to Lisbon, Portugal, went on strike – the first company strike in decades – against the extension of weekend work.13
And at the end of September, workers of the VW subsidiary Autovision in Emden and Osnabrück, Germany, demanded that VW hires them directly. They had originally worked for VW as temporary workers before they were hired by Autovision, which serves as a kind of subcontractor and dispatches them to the VW plants.14
These mobilizations and strikes are a reaction to the discriminating use of temporary work by VW as well as the increasing work pressure in VW factories, and they reflect the demand of workers in ‘peripheral’ countries to close the wage gap in comparison with VW workers in Germany.
The worker mobilizations hit VW – which is still partly owned and largely controlled by the German state – in a decisive time. While VW became (again) the biggest global car maker in 2016,15 the diesel emissions scandal, i.e., the deliberate violation of pollution regulations, and its ripple effects threaten to destabilize and weaken the company. At the same time, the apparent transition to electric cars poses a big challenge as the established factory-based mass production of fuel-run automobiles cannot easily be converted to producing battery-run automobiles.16 Now, the diesel emissions scandal might accelerate the intended (expensive) transformation of VW, and the workers are supposed to pay the price – at least, that seems to be the management’s plan.
China as the biggest (fuel-run) automobile market and producer globally is a center stage of VW’s transformation. The country stands for 41 percent of VW’s global vehicle sales and 49 percent of its global pre-tax profits,17 and China is already the leading producer of and market for electric cars in general – though this automobile ‘green leap forward’ is highly subsidized by the Chinese state.18
VW as well as Renault-Nissan, Ford, and other global car makers are establishing new joint ventures with Chinese partner companies to start with the mass production of electric cars19 – the third wave of the establishment of such auto joint ventures after the 1980s and the mid-1990s/mid-2000s.20 The times have changed, though, with VW and the others facing severe competition from the side of the Chinese auto producers, in a time when these also started to expand globally.21
Impact of workers struggles in China
Whether and how the transformation of VW (and other car producers) will work out depends on the development of the auto workers struggles, too. The struggle of the FAW-VW workers in Changchun is the latest example of auto worker’s militancy in China that started in the 1990s and 2000s – including directly employed as well as temporary agency workers22 – and saw a first peak during the strike wave in 2010.23
Meanwhile, the ongoing transformation of the Chinese economy – restructuring, relocation, ‘upgrading’ – is affecting all workers. The flattening of the economic growth rate since the late 2000s was followed by a flattening of the wage increase rate.24 However, the workers’ expectations are still high as they continue to demand improvements in the face of their still dire working conditions.
After strikes and other struggles were largely successful in raising wages and improving conditions in the 2000s, they have been met with more counterpressure by managements and the state in recent years – a result of the tightening political control and repression of social protests under the CCP leadership around president Xi Jinping since he came to power in 2012–13.
It is against this background, that the temporary agency workers at FAW-VW in Changchun face the joint ignorance and repression by VW, the Chinese state-owned enterprise FAW, the CCP authorities and the police. Their struggle is still going on, more will follow.
2 China Labour Bulletin. 2017. “Hundreds of Volkswagen workers in northeast China demand equal pay.” February 27. Retrieved September 7, 2017: http://www.clb.org.hk/content/hundreds-volkswagen-workers-northeast-china-demand-equal-pay. For China’s Contract Labor Law see People’s Republic of China. 2008. “China’s Labor Contract Law.” lawinfochina.com. Retrieved September 13, 2017: http://www.lawinfochina.com/display.aspx?id=6133&lib=law.
3 Volkswagen. 2012. “Charter on Temporary Work for the Volkswagen Group.” Volkswagenag.com, November 30. Retrieved September 13, 2017: https://www.volkswagenag.com/presence/nachhaltigkeit/documents/policy-intern/2012%20Charta%20Temporary%20Work%20EN.pdf.
4 China Labour Bulletin. 2017. “Hundreds of Volkswagen workers…”
5 China Labour Bulletin. 2017. “Volkswagen worker representatives arrested at Changchun plant.” June 6. Retrieved September 7, 2017: http://www.clb.org.hk/content/volkswagen-worker-representatives-arrested-changchun-plant.
6 FAW-VW Workers, Changchun. 2017. “Joint letter demanding the unconditional release of Fu Tianbo who represents us in the defense of our rights.” Weibo posting, August 18. Retrieved September 7, 2017: https://m.weibo.cn/status/4142182485694066 (Chinese), http://www.labournet.de/?p=122305 (English, German) and FAW-VW Workers, Changchun. 2017. “Open letter to the Central Inspection Team.” Weibo posting, September 13. Retrieved October 5, 2017: https://m.weibo.cn/status/4151463591098974 (Chinese).
7 China Labour Bulletin. 2017. “Chinese Volkswagen workers call on German parent company to assume responsibility for violations.” July 13. Retrieved September 7, 2017: http://www.clb.org.hk/content/chinese-volkswagen-workers-call-german-parent-company-assume-responsibility-violations; China Labour Bulletin. 2017. “FAW-Volkswagen agency workers issue letter in German calling for accountability and solidarity.” July 19. Retrieved September 7, 2017: http://www.clb.org.hk/content/faw-volkswagen-agency-workers-issue-letter-german-calling-accountability-and-solidarity; FAW-VW Workers, Changchun. 2017. “Call for mediation by temporary workers from FAW-Volkswagen (Changchun, China).” Weibo posting, July 15. Retrieved September 15, 2017: https://m.weibo.cn/status/4130289368060226 (Chinese), http://www.labournet.de/?p=119093 (German); FAW-VW Workers, Changchun. 2017. “We demand a clear reaction from VW Germany on our call for mediation.” Weibo posting, August 13. Retrieved September 15, 2017: https://m.weibo.cn/status/4140342817384118 (Chinese), http://www.labournet.de/?p=120251 (German).
8 VW Works Council. 2017. “Letter from the VW works council in Europe to the temp workers in Changchun, China.” Weibo posting, September 2. Retrieved October 5, 2017: https://m.weibo.cn/status/4147464845757775 (Chinese, German), http://www.labournet.de/?p=119093 (German).
9 For the comment (“德国人不管，我们自己奋斗吧”) see https://m.weibo.cn/status/4147464845757775 (Chinese). Those familiar with VW, the VW works council, and the IG Metall leadership will not be surprised by the reply letter. One of the two heads of VW’s European and global works council, Bernd Osterloh, interprets his post as that of a co-manager at VW and was the subject of a recent row in Germany about the hundreds of thousands of euros he earns at VW every year. See Tatje, Claas. 2017. “Satte 750.000 Euro. Der Betriebsratschef von Volkswagen verdient wie ein Topmanager. Das ist zu viel.” Zeit Online, May 17. Retrieved September 30, 2017: http://www.zeit.de/2017/21/vw-betriebsrat-chef-bernd-osterloh-gehalt (German).
10 Der Spiegel. 2017. “Volkswagen soll Militärdiktatur in Brasilien unterstützt haben.” Spiegel Online (German), July 24. Retrieved September 17, 2017: http://www.spiegel.de/wirtschaft/unternehmen/brasilien-volkswagen-soll-militaerdiktatur-unterstuetzt-haben-a-1159357.html; Norddeutscher Rundfunk. 2017. “Komplizen? VW und Brasiliens Militärdiktatur.” 4 Podcats on NDR’s website, Retrieved September 17, 2017: https://www.ndr.de/info/podcast4344.html (German).
11 Shotter, James. 2017. “VW agrees 14% pay rise to end Slovakia strike.” Financial Times, June 25. Retrieved September 16, 2017: https://www.ft.com/content/251ac470-59da-11e7-b553-e2df1b0c3220; Bershidsky, Leonid. 2017. “VW’s Strike in Slovakia Exposes a European Divide.” Bloomberg, June 21. Retrieved September 16, 2017: https://www.bloomberg.com/view/articles/2017-06-21/a-strike-in-slovakia-exposes-a-european-divide.
12 Inicjatywa Pracownicza. 2017. “VW Poznań: They sack us – we form a new union!” ozzip.pl, August 10. Retrieved September 15, 2017: http://ozzip.pl/teksty/informacje/wielkopolskie/item/2284-zaloga-volkswagena-oni-nas-zwalniaja-a-my-zakladamy-nowy-zwiazek-zawodowy (Polish), http://www.labournet.de/?p=120198 (German). The workers’ struggles in Poland and Slovakia benefit from a relative labor shortage. VW has increased production and built new plants but cannot easily find enough workers. Unemployment in several eastern European countries has fallen as emigration and changing demographics have led to a drying out of the labor market.
13 Wise, Peter. 2017. “Warning over Portugal car plant after strike.” Financial Times, September 3. Retrieved September 16, 2017: https://www.ft.com/content/61f662ca-8f0c-11e7-9084-d0c17942ba93.
14 VW-Autovision Workers. 2017. “VW Emden: Etwa 100 Beschäftigte der Konzerntochter Autovision verlangen Verträge mit VW.” labournet.de, October 3. Retrieved October 7, 2017: http://www.labournet.de/?p=122156 (German) and http://www.labournet.de/wp-content/uploads/2017/10/vw_emden_resolution.pdf (German).
15 Inagaki, Kana. 2017. “VW overtakes Toyota as world’s biggest automaker in 2016.” Financial Times, January 30. Retrieved September 13, 2017: https://www.ft.com/content/8c3471f8-e6b5-11e6-893c-082c54a7f539.
16 Ewing, Jack. 2017. “As Emissions Scandal Widens, Diesel’s Future Looks Shaky in Europe.” The New York Times, July 25. Retrieved September 16, 2017: https://www.nytimes.com/2017/07/25/business/diesel-emissions-volkswagen-bmw-mercedes.html.
17 Clover, Charles. 2017. “Beijing’s uneasy deals with overseas car groups under strain.” Financial Times, September 1. Retrieved September 5, 2017: https://www.ft.com/content/9d48dade-8ee3-11e7-a352-e46f43c5825d.
18 Holland, Tom. 2017. “Beijing’s grand plan for electric cars: looks good, but under the bonnet…” South China Morning Post, August 28. Retrieved September 30, 2017: http://www.scmp.com/week-asia/opinion/article/2108353/beijings-grand-plan-electric-cars-looks-good-under-bonnet.
19 Bradsher, Keith. 2017. “China’s Electric Car Push Lures Global Auto Giants, Despite Risks.” The New York Times, September 10. Retrieved September 11, 2017: https://nyti.ms/2xUuR6E; Clover, Charles. 2017. “Beijing’s uneasy deals…”
20 Zhang Lu. 2015. Inside China’s Automobile Factories: The Politics of Labor and Worker Resistance. New York: Cambridge University Press, pp. 29–30.
21 Zheng Lichun and Che Pan. 2017. “Three Chinese automakers may build joint factory in U.S.” Caixin, September 13. Retrieved September 14, 2017: http://www.caixinglobal.com/2017-09-13/101144727.html.
22 Ruckus, Ralf. 2016. “Chinese Capitalism in Crisis, Part 1: Zhang Lu on exploitation and workers’ struggle in China’s auto industry.” In: Sozial.Geschichte Online, 18, pp. 119–144. Retrieved May 8, 2016: http://duepublico.uni-duisburg-essen.de/servlets/DerivateServlet/Derivate-41181/07_Ruckus_ZhangLu.pdf.
23 Zhang Lu. 2010. “Do Spreading Auto Strikes Mean Hope for a Workers’ Movement in China?” labornotes.org, July 13. Retrieved June 20, 2016: http://labornotes.org/2010/07/do-spreading-auto-strikes-mean-hope-workers%E2%80%99-movement-china; Friends of Gongchao. 2010. “‘Sie haben das selbst organisiert’ – Die Streikwelle von Mai bis Juli 2010 in China.” In: Pun Ngai, Ching-Kwan Lee, et al.: Aufbruch der zweiten Generation. Wanderarbeit, Gender und Klassenzusammensetzung in China. Berlin: Assoziation A, pp. 225–257. Retrieved January 14, 2017: http://www.gongchao.org/2010/10/01/sie-haben-das-selbst-organisiert-die-streikwelle-von-mai-bis-juli-2010-in-china (German); Wang Kan. 2011. “Collective Awakening and Action of Chinese Workers: The 2010 Auto Workers’ Strike and its Effects.” In: Sozial.Geschichte Online, 6, pp. 9–27. Retrieved January 19, 2012: http://duepublico.uni-duisburg-essen.de/servlets/DerivateServlet/Derivate-29001/03_WangKan_Strike.pdf.
24 Hancock, Tom. 2017. “China’s migrant workers feel pinch as Beijing pulls back on wages.” Financial Times, September 3. Retrieved September 5, 2017: https://www.ft.com/content/0383433e-8ca0-11e7-a352-e46f43c5825d.