The situation in the automotive industry has definitely seen better times. A crisis summit in Berlin, weak sales figures in China, the threat of penalties in the EU – fears of decline are spreading. While politicians are feverishly considering how they can pamper the car manufacturers – a scrappage scheme, an extension of tax benefits – their managers are pushing the workforce to accept harsh cuts.

It may come as a surprise that the trade unions are being stubborn and refuse to back down from their earlier demands. At Volkswagen, they are demanding a guarantee of employment beyond 2030, and a 7% pay rise. In the event of failure, the prospect of a strike at Christmas is already being held out after the end of the „industrial peace“ period on 30 November. At competitor Stellantis, some production lines could come to a standstill. The Italian trade unions have called for a one-day strike on 18 October.

But just because a company is holding the collection plate, does not mean that savings are being made everywhere. For example, despite all its problems, Volkswagen paid out a whopping 9 euros per ordinary share in dividends in the spring. The dividend yield at the current share price is over 9%. Over three years, VW's dividends have almost doubled, but this shower of cash has not helped the share price, which has more than halved. At Stellantis, the dividend yield is even higher. Caviar and bubbly for the shareholders, brown bread for the workforce? This is unlikely to have increased the willingness of the trade unions to tighten their belts.

Nevertheless, the operational problems are apparent. The domestic plants are underutilised and, therefore, not competitive. One of the main reasons is that the low demand for electric cars in Europe does not allow for higher capacity utilisation in the long term. The price is now being paid for the fact that employee representatives at VW and other European manufacturers have fought to bring as many e-series as possible into the domestic plants.

A rapid increase in sales cannot be expected with the existing model range, and group management must, therefore, react. That places an additional burden on the wage negotiations. Both sides have made mistakes. And neither wants to take responsibility.