VWM: A study of unstable articulation between productive innovation and socio-labour progress

Type de publication:

Conference Paper


Gerpisa colloquium, Mexico (2016)


automobile industry, innovation, restructuring, socio-labour progress


Recent studies regarding the quality of employment in global value chains suggest that the possibility of achieving a positive articulation between economic innovation and socio-labour progress, depends primarily on a combination of diverse factors on a macro, meso and microeconomic level. This research looks at the case of VWM with a particular focus on the microeconomic level. Mention is nevertheless made of the other two levels, particularly regarding the opportunities and restrictions arising from them, in achieving this articulation.
Based on the aforementioned, it is argued that not only is VWM one of the most innovative companies in the automobile industry in Mexico in terms of their productive systems, but also has one of the most mature systems of labour relations in the country, particularly in the first two decades of the twenty first century. These advances contrast sharply with the regression in labour relations experienced during the most important phase of the VWM restructuring (1992 and following years). We would argue that the VWM case, within the sector, is an exceptional example of positive articulation between economic innovation and socio-labour progress. This is, however, an unstable articulation, given the existence of a sectorial, macroeconomic and globally adverse environment (that weakens union dialogue and substantially limits the possibility of achieving comparable advances in both dimensions of innovation, and, especially, of avoiding regressions).
In order to develop this argument, we describe and analyse the importance of the restructuring process of VWM in all its diverse phases, as well as its implications for labour conditions and relations. We demonstrate its articulation with the corporate culture of the company by reviewing statistical, documentary and bibliographic sources, as well as by conducting in-depth interviews and applying questionnaires to company and union officials.
As indicators of articulation/ disarticulation between productive innovation and socio-labour progress, we analyse the evolution of the internal labour market of VWM in the widest context occurring in automobile industry; dynamics of conflict resolution during the period of restructuring; the role played by unions and characteristics of the representation structure in the company, complemented by a comparison of the content and main advantages of collective bargaining in VWM as opposed to other sectors; and finally, the relationship between the productivity of the company and workers’ wages.
Three distinctive features of VWM were found that explained the opportunities for socio-labour progress: their concept of “professional”, the training policies, and the recognition of an authentic union representation with institutionalized spaces for negotiation and conflict resolution. In contrast, their social responsibility policy is limited and barely impacts the quality of employment in either VWM or their suppliers.
The research showed that this situation affects differently the distinct contingents of workers within the same company. While some experience progress (in general those in more stable and longstanding positions), others experience regressions or stagnation (mostly new, temporary, subcontracted workers). As such, in addition to the fact that there are clear differences within VWM between permanent and temporary workers (the latter being those that most experience loss of rights when confronted with critical situations), it appears that newly employed workers have lower incomes than longstanding workers. This situation of inequality and vulnerability is aggravated in the case of those working for VW suppliers, as shown in the crisis of 2008/ 2009.
Furthermore, we identified both endogenous and exogenous factors of the company that threatened this articulation. The loss of competitivity of the Puebla plant in comparison with China; the fragmented union structure and poor quality of representation in the sector; the absence of labour policies that explicitly seek to ensure that economic progress in the industry benefits all workers; as well as industrial policies that focus on competitivity through low wages, all fail to create the enabling climate needed to provide stability for the combination of productive innovation and socio-labour progress.

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