1. Numsa – IG Metall Project
Prepared by Melanie Roy, Elias Kubeka, Carmen Ludwig and Hendrik Simon
18th and 19th April 2017

2. Challenges Along the Value Chain
Outsourcing and offshoring (relocation) of production as dominant features of the restructuring processes in the auto industry on the national and global scale
→ Cost reduction pressure on component suppliers and outsourcing has increased.
→ fragmentation of labour standards

3. Background Information on Value Chain Project Numsa- IG Metall Project: Objectives
Both trade unions have decided to organize along value chains and to reject the division into ‘core’ and ‘non-core’ workers
→ Project between IG Metall and Numsa to organize along global value chains:
Two Parts of the Project: Workshop and Research

4. Background Information on Value Chain Project Numsa- IG Metall Project: Objectives
Workshop:
Building a common understanding among participants from Germany and RSA
Building lasting transnational links and solidarity between the two unions NUMSA and IG Metall and between shop stewards from supplier and logistics companies
Research:
Identifying and expressing workers experiences on the shop-floor and therefore, provide a participatory view
Gathering empirical information on the structure of value chains in South Africa as compared to Germany

5. Auto Value Chain
Germany

6. Auto Industry Germany
About employees auto industry (excluding steel)
to OEMs
to truck manufacturing
to suppliers
Current trends:
- digitalisation and automation
- de-carbonisation/electrification
- - relocation particularly to eastern European countries

7. Example 1: Supplier Seat Manufacturing to OEM 1
Mutual dependency with OEM as the dominant player
Governance through “open book philosophy”
OEM determines all components and conditions: cost pressure through competition
OEM is decreasing dependency: The 1st, 2nd and 3rd tier of seat production for OEM1 is provided by five main international suppliers to varying and interchangeable degrees
81 per cent of costs materials, 19 per cent influenced by supplier → pressure on employees (wages, working time)
→ supplementary bargaining agreement

8. Example 2: Contract Logistics Company in Plant of OEM 2
- Logistics Company: Particular strong dependency on OEM plant
- OEM as the centre of power in the value chain
→ Quotes of works council members:
Dependency on OEM:
A: 'Customer is always right.'
A: 'The OEM gets what it wants.'
B: 'In the end, we are completely dependent on OEM 2.'
Imbalance of Power:
A: '[Counter-Power via] Strikes is possible. But only once. Then OEM 2 will simply replace your company.'
(discipline and punish)

9. Example 2: Contract Logistics Company in Plant of OEM 2
Perfection in Outsourcing:
OEM 2's new company policy: Allocating logistical ‘options’ as small as possible
→ circumvention of the power of trade union organisation in individual companies
→ Increasing Competition (The Curse of 'Competitiveness')
Works council member B: 'War of nerves.'

10. Value Chains as Catalysts of Inequality
Inequality Along the Value Chain:
A: 'We live in a four class-society.'
1. Employees by OEM
2. Labour broker worker by OEM
3. Employee by Supplier/Contract Logistics Company
4. Labour broker worker by Supplier/Contract Logistics Company
→ Value Chains as catalysts of inequality
Mixed experiences with solidarity among OEM's and supplier/logistics' workers in the same plant

11. Income Differentials

12. Counter-Strategies IG Metall
Regulation
Collective Framework Agreement Metal and Electrical Industry (ERA)
In-house agreements on labour broking
Global Framework Agreements
Organising
Organising campaigns targeting suppliers and new sectors (renewable energy)
Shop steward Committee JIT
Transnational Partnership Initiatives

13. Auto Value Chain
South Africa

14. The Automotive Industry Value Chain in South Africa and Economic Perspective
Auto industry is characterised by the concentration of few dominant original equipment manufacturers (OEMs) worldwide
The suppliers to the industry
Steel companies
Workshop Equipment Suppliers
OEM Parts manufacturers ( 7 in Total)
Generic Parts Suppliers
Paint suppliers
Insurance Companies
Fitment Companies
Tyre companies
Manufacturers of shock absorbers, exhausts and other parts
Recycling companies

15. THANK YOU