Hungary’s Association of Automotive Component Manufacturers (MAJOSZ) says today’s (26 January) walkout by Audi workers in the country is symptomatic of severe wage pressure being exerted as a result of dire labour shortages.
The Visegrad 4 countries consisting of Hungary, Poland, Czech Republic and Slovakia, are all experiencing a wages arms race as foreign OEMs flock to the low-cost destinations, but this is having the unwanted effect of sometimes triggering strike action.
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Around 1,500 workers at Audi’s Gyor engine plant in Western Hungary, walked out for two hours this morning in a protest about wages, with talks now taking place in the city between the automaker and the AHFSZ union to resolve the dispute.
“We are in negotiations with trade unions of course,” an Audi Hungary spokesman told just-auto from Gyor. “It is about wages.
“We have no information about more strikes in the future.”
Although the lightning stoppage was relatively short, it is nonetheless a worrying sign for manufacturers in Hungary of worker power starting to flex its muscles in the guise of demands for better pay in the teeth of a shrinking worker pool.
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By GlobalData“Labour shortage is more and more critical – wages have to increase,” MAJOSZ secretary-general Dénes Klujber told just-auto from Budapest. “The [Hungarian] government increased wages 15% – this will stop people to leave Hungary. It is a big problem and wages in Hungary were so low comparing to other post-socialist countries.
“On the one side it is good for investors because they have low wages in a low-wage country, but it can hit back. People see in neighbouring countries the salaries are much higher. Systematic increases will help bring people back to Hungary. Certainly to go abroad is not so comfortable – salary is important but family and friends stay at home.
“People and unions are starting to actions [strikes]. It is time for some common thinking – how to increase wages. Hungary is the lowest – based on the data we have in the Visegrad 4. It can have advantages, but now we see the disadvantages.”
Freedom of movement between the Visegrad 4 European Union (EU) countries means labour is at liberty to go wherever it sees fit, but a historical quirk which saw Budapest’s borders redrawn last century, means there are Hungarian speakers still in Romania, Slovenia and Ukraine for example.
The latter could prove particularly attractive to supply some Hungarian manpower shortages, although its location outside the EU may prove somewhat problematic in securing the right to work.
“In Ukraine they could bring people who speak Hungarian and integrate very fast,” added Klujber. “There would be a good chance for them to come to Hungary – the structure should be set up for that – some government structure for this kind of employment.
“These ideas are already [with] the government.”
The supplier chief also noted there was an industrial strategy formulated by the Hungarian government, in which the component association had participated.
“It is important because automotive is on of the strongest sectors in Hungary,” said Klujber. “It is important for government the companies are happy and workers are ready to work.”
An indication of just how important vehicle manufacturing is to the Hungarian economy can be gauged by the fact Budapest exports 85%-90% of its automotive production while the sector contributes a hefty 15% to domestic GDP.
Around 150,000 people work in the Hungarian automotive sector in 600 companies with total exports totalling EUR19.6bn (US$21bn), while 15 of the world’s top 20 suppliers have factories in Hungary.
Despite the undoubted labour challenges, MAJOSZ actively seeks overseas Tier 1s to set up shop in Hungary with their trickle-down effect to smaller domestic suppliers while also encouraging companies engaged in non-auto work to consider opportunities in the sector.
The AHFSZ union was not immediately available for comment.
