While American manufacturers struggle to compete globally and continue to move jobs to poorer countries, VW, Mercedes-Benz, BMW and other German manufacturers say they’re able to pay their workers high wages because they focus on making their products the best and most sought after in the world. German-manufactured products from cars to music systems are revered worldwide today for their high quality and perfection of detail — characteristics for which consumers are willing to pay a premium price.
The benefits of cooperation
German manufacturers point to their system of labor-management cooperation as an asset, not a liability, which has helped them turn the country into one of the world’s most formidable advanced manufacturing machines and the most successful exporter among developed countries.
“It’s in our DNA” to work with employees on a harmonious basis and “row in the same direction,” said a VW executive, explaining why the company braved the controversy over the union election. Another union vote is possible next year. German companies realize their workers are on the front lines of the manufacturing process and can make valuable suggestions that have the potential to improve VW products and further the company’s global ambitions.
Analysts point out that it was worker cooperation that enabled German manufacturers to keep a lid on wages and dramatically improve productivity at a critical juncture when the German economy was struggling with the reunification between the East and West two decades ago. Disciplined cooperation between workers and management enabled Germany to negotiate the economic difficulties and emerge as the healthiest economy in Europe — now the envy of the rest of the continent and much of the world as other countries struggle with epic debt and economic problems.
VW seeks to instill a “passion for detail,” cooperation and other values characteristic of the German system in its employees here in Tennessee, the official said. It invites employees into its “team,” makes available a chic uniform of smartly casual work clothing that even the executives wear on the plant premises and encourages workers to “think blue” — that is, dream up new ways to improve the company and its products.
VW’s efforts seem to be paying off: The carmaker not only is expanding in the U.S. with the start of a new line of SUVs here in Tennessee in 2016, but it is the most successful Western manufacturer in the world’s largest car market today — China — and has ambitions to surpass Toyota and become the No. 1 carmaker worldwide by 2018. Meanwhile, Detroit’s carmakers have presided over a diminishing share of the U.S. market and lag behind their German competitors in most other countries overseas.
The lure of a job
Unlike the defeated drive for unionization here earlier this year, VW’s newly inaugurated apprenticeship program has met no political opposition and stands a good chance of becoming a model for other U.S.-based businesses. VW has teamed up with Chattanooga State and other local community colleges to put together three-year programs that lead to technical engineering degrees and guaranteed jobs in VW plants.
Program graduates — 13 of whom marched down the aisle to the strains of “Pomp and Circumstance” here earlier this month to collect their VW engineering certificates — can work at the plant here or at any of 106 other places in the world at a starting salary of about $44,000 a year, with generous medical and other benefits.
While most American high school graduates pay $20,000 to $40,000 a year to earn a bachelor’s degree that no longer guarantees them a job when they graduate from college, VW’s apprentices earn $10 to $11 an hour as they attend classes and work part-time in the assembly plant, learning skills in electronics, mechanics, robotics, computer programming and other areas before they launch into guaranteed full-time jobs.
Although the millennial generation is the most debt-scarred and job-poor in decades, the money VW apprentices earn helps them pay their community college tuition and fees. Most classes are conducted in VW’s pristine, light-filled classrooms adjacent to its spotlessly clean and airy factory.
In Germany, the manufacturers, unions and government share the expense of running apprenticeship programs — a clear dividend in a system where parties have chosen to cooperate rather than fight. Analysts say U.S. businesses have balked at the cost of setting up such programs on their own. Were more American businesses able to share the expense, more might be willing to establish apprenticeship programs.
Germany’s programs are perhaps the most comprehensive worldwide, although countries from Australia and Great Britain to Canada and Switzerland have some sort of apprentice system. In Germany, schooling is available for over 300 professions, ranging from nursing and secretarial work to manufacturing and construction. And a majority of Germans have completed such programs.