Audi, BMW workers stage strikes amid talks over wages, hours

BMW staff at three factories in Dingolfing, Landshut and Regensburg in Germany were to down tools on Friday amid demand for higher pay and shorter working hours. (Reuters)
Updated 12 January 2018

Audi, BMW workers stage strikes amid talks over wages, hours

FRANKFURT: Workers at German companies including premium carmakers Audi and BMW are staging further walkouts on Friday amid labor talks seeking higher pay and shorter working hours which are set to continue next week.
Powerful labor union IG Metall said workers at Audi’s main plant in Ingolstadt in Bavaria downed tools during the night shift and BMW staff at three factories in Dingolfing, Landshut and Regensburg were to follow suit on Friday.
Spurred on by the fastest economic growth in six years and record low joblessness, the union is demanding 6 percent more pay for 3.9 million metals and engineering workers.
It has also embarked on its first major campaign for shorter working hours in more than three decades, demanding that workers gain the right to reduce their weekly hours to 28 from 35 to care for children or elderly or sick relatives and then return to full-time employment after two years.
Employers have offered 2 percent plus a one-off €200 payment in the first quarter.
They have rejected demands for a shorter working week unless hours could be increased temporarily as well so as not to put output at risk.
Labor bosses and industrial employers took a small step toward a deal in regional talks in southwestern Baden-Wuerttemberg on Thursday, agreeing to appoint experts to look into the issue of working hours.
Some 160,000 workers have already taken part in industrial action this week to support IG Metall’s wage claims and the union has threatened to call for 24-hour walkouts if talks fail to make progress.
Labor talks for workers in Baden-Wuerttemberg will resume on January 24. Talks in Bavaria continue on Monday and in North Rhine-Westphalia resume on Thursday.


Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.