Test of Mettle

New Union Boss to Tackle VW Crisis

Joerg Hofmann new IG Metall boss source DPA alexandr heinl
Joerg Hofmann, IG Metall's new boss, leading the largest labor union in the world.
  • Why it matters

    Why it matters

    German engineering union IG Metall is the largest union in the world and its new leader, Jörg Hofmann, will play an important role in VW’s crisis management.

  • Facts

    Facts

    • Jörg Hofmann was elected as the new chairman of IG Metall on Tuesday, backed by 91.3 percent of the delegates at a meeting in Frankfurt.
    • Mr. Hofmann will replace Berthold Huber as a member of VW’s supervisory board.
    • IG Metall and VW’s works council on Tuesday issued a joint statement calling for a change in the company’s hierarchical management culture.
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The world’s largest trade union, German engineering union IG Metall, has a new boss.

Jörg Hofmann, 59, was elected with a majority of 91.3 percent at a meeting in Frankfurt on Tuesday. He was deputy chairman to Detlef Wetzel, who has retired after two years in the job.

The teacher’s son, who studied economics and sociology at universities in Germany and France, doesn’t exactly may look like a tubthumping trade unionist.

But he will wield the kind of power that worker representatives in other countries, including Britain and the United States, can only dream of.

It comes through a handful of influential channels. First, through strong ties with the center-left Social Democrats, who are junior partners in Chancellor Angela Merkel’s government.  Then there is the collective bargaining system that enables the union with its 2.7 million members to set benchmark wage deals for Europe’s largest economy. And finally, Germany’s legally enshrined co-determination, which gives unions supervisory board seats in large companies.

German unions are also increasingly willing to resort to strike action to further their goals. Lufthansa pilots have gone on strike 13 times since May 2014, and train drivers caused widespread transport chaos with no less than nine strikes over a one-year period until a deal was reached in May.

IG Metall has a stronger presence at VW than at any other industrial company. More than 90 percent of the automaker’s core workforce are union members.

Mr. Hofmann is all the more powerful because he is about to take a seat on the supervisory board of VW, replacing fellow unionist Berthold Huber, which will give him responsibility for helping to clear up the diesel emissions scandal.

Coinciding with his election, IG Metall on Tuesday released a joint statement with VW’s powerful works council demanding an end to the company’s notoriously hierarchical, do-as-I-say management culture, which some say is partly to blame for the debacle.

VW manipulated emissions-testing software in a scandal that emerged in September and affected 11 million vehicles. The carmaker is planning a new strategy that includes cost-cutting measures.

Facing billions of euros in fines and compensation claims, VW must do more to involve workers in decision-making processes and its shareholders must become more transparent, the statement said.

“Volkswagen is a beacon of co-determination,” the statement said, pledging to defend and develop the model. “The worker representatives and IG Metall are ready to take responsibility for their own actions, but not for the failure of others.”

They also pledged to draft a joint position paper to spell out the necessary changes at VW.

IG Metall has a stronger presence at VW than at any other industrial union. More than 90 percent of the automaker’s core workforce are members.

Mr. Hofmann is well aware of the dangers the VW crisis poses for employee rights in Germany.

If it does lasting damage to Germany’s standing as an industrial location, IG Metall will have to scrap its bold plans for the future.

If investors start to pull out of the country or shun the Made in Germany brand, IG Metall’s battle will no longer be about higher pensions, more flexible working hours or protecting collective wage deals. It will be about safeguarding jobs, managing short-time working and fighting the dismissal of temporary workers.

It would be tragic for Germany’s union movement which has only just managed to end years of membership declines. Mr. Hofmann’s two predecessors, Mr. Wetzel and Berthold Huber before him, managed to modernize IG Metall by opening it up to new groups such as the growing army of temporary workers. Mr. Hofmann will be judged by whether he manages to keep up the membership growth after five consecutive annual increases in the years running up to 2015.

At first sight though, it’s hard to believe that he will be able to attract young new employees in droves. Mr. Hofmann hails from the town of Oppelsbohm in the southwest German region of Swabia, and is at his best in front of smaller audiences of 100 or 200 where he never fails to prove that a local accent and skillful argumentation aren’t mutually exclusive.

He has a strong command of economics and is a specialist on pay negotiations, having worked on all the main collective IG Metall agreements in recent years. He also has an impressive eye for detail ranging from the carbon emissions of car fleets to the minutiae of salary tables, though some find that trait exasperating and even reminiscent of aspects of VW’s management culture.

Mr. Hofmann is proud of his close ties with government and has worked on government panels on key issues such as the future of work in the digital age.

The new labor leader is likely to have plenty of work but does not seem to lack the necessary mettle.

 

Handelsblatt’s Frank Specht writes about the German labor market. To contact the author: specht@handelsblatt.com

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