January 24, 2019 / 11:44 AM / in 24 days

Audi's Hungarian plant closed by strike in blow to economy

BUDAPEST, Jan 24 (Reuters) - Audi’s Hungarian factory, one of the largest production plants in the Volkswagen group, shut on Thursday as workers began a one-week strike for higher wages.

A union representing more than half of the plant’s 13,000 workers said it was ready to go the full 168 hours to force a deal, adding it could prolong the stoppage or call further strikes, threatening a major contributor to Hungary’s economy.

“Work has come to a complete stop at the entire plant,” AHFSZ spokesman Tibor Szimacsek said. “We have even increased our support since our warning strike on Friday.”

The Hungarian economy has grown by more than 4 percent in the last two years, and has become increasingly reliant on car manufacturers and their subcontractors.

The Hungarian Audi business makes a direct GDP contribution of about 1.4 percent, a study by Peter Novoszath, professor at the National Public Service University, shows. The unit had 2017 net revenue was 2.34 trillion forints ($8.3 billion), about 12.2 percent of the carmaker’s global figure.

AHFSZ was open to continued wage talks with Audi, but has yet to receive any indication that its demands may be met, or even a meeting for continued negotiations, Szimacsek said.

Audi has offered a total 20 percent wage increase for this year and next, but the union wants an immediate 18 percent increase, and even more down the line to bring its workers more in line with Slovakians, who make 28 percent more at Audi, or Poles, who earn 39 percent more.

Spokeswoman Judit Mithay-Marko said Audi acknowledged the strike and will continue the wage talks in the hope that the strike will end before seven days.

“We trust that wage talks reach an equilibrium and we won’t have to lose an entire week’s worth of production,” she said, confirming that the factory had closed.

“Our customers will not notice the effects of the production shortfall from the shutdown.”

The government considers the strike a result of steep wage hikes in recent years, including among several automakers, Gergely Gulyas, the Prime Minister’s chief of staff, said.

Daimler, Suzuki and General Motors have units in the country, and BMW committed to building a large new factory last year.

“There is a wage competition now, which is natural,” Gulyas told a news conference. “We would be glad to see as much of the union’s demands to be met as possible.” ($1 = 281.3000 forints) (Reporting by Marton Dunai Editing by Alexander Smith)

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