Globalization and the Labor Movement in the European Automotive Industry: Competition or Transnational Alliance?

Abstract

With the transformations of global economic globalization in recent decades, the automotive industry has been exemplary in applying new operational models in production and labor management. The main characteristics of these models include the fragmentation of production chains through Foreign Direct Investment (FDI) in countries with low labor costs and weak union organization. In Europe, this trend is manifested by the relocation of transnational automotive industries from Western European countries – most notably the German automotive industry – to Central and Eastern European countries. The relocation of companies has served as a bargaining tool for corporate management during periods of wages negotiation with unions, exerting pressure to reduce working conditions in the industrial plants across each country. Recognizing this early on and facing numerous challenges, European unions have sought to circumvent the competition that this production model imposed on the labor movement by building exemplary experiences of transnational collaboration, which are described in this article.