Volkswagen builds factory in turkey: business with the autocrat

Volkswagen is building a factory in Turkey. Erdogan’s thanks: He instructs his officials to use a VW Passat as their official car.

Golf 7 bodies are assembled in Zwickau. Soon, VWs will also come from Turkey Photo: Karsten Thielker

"We know that the decision for Turkey will also meet with criticism," admits Thomas Steg. Volkswagen’s chief lobbyist justifies himself: Turkey is "a developed market economy," he says. The official signing of the contract with the Turkish government is still pending. In principle, however, everything has been settled, emphasizes VW Production Director Andreas Tostmann.

The new plant, which is to be built in western Turkey near the Aegean metropolis of Izmir, will take over production of the VW Passat, which was previously located in Emden. In Emden, capacities for the construction of electric cars are to be freed up for this purpose. VW plans to produce around 300,000 vehicles a year at the new Turkish site. They are intended for export to Eastern Europe, Russia and the Middle East. Construction will start as early as next year, and the first cars are expected to roll off the production line in 2022.

The decision in favor of Turkey was preceded by months of wrangling, in which VW most recently played Bulgaria and Turkey off against each other. The direct subsidy offered by the Turkish government for the new plant is said to have tipped the scales. VW CEO Herbert Diess has been to Ankara several times and personally negotiated with President Recep Tayyip Erdogan. According to EU Commission circles, Erdogan offered around 400 million euros in direct subsidies, plus the promise that the government would buy 40,000 vehicles from VW.

While no one in German politics wanted to take a stand on Volkswagen’s Turkey deal and even Green MEP Cem ozdemir kept a low profile, Green MEP Reinhard Butikhofer went on the offensive. "The decision causes consternation in view of the human rights situation, the abolition of press freedom and the rule of law that no longer exists," he told the taz.

Unscrupulous companies from abroad

Butikhofer is also outraged that Turkey, as a candidate for EU membership, has thrown another EU country, Bulgaria, out of the running by the Turkish government’s promise of subsidies that would be illegal in the EU at this level. "At the same time, Turkey is in the customs union with the EU and should actually also abide by the applicable subsidy rules." Instead of 400 million, a maximum of 250 million euros in subsidies had been allowed, he said. Bulgaria has had to comply with these requirements, Erdogan has ignored them.

However, the subsidies, which are said to account for a third of the cost of building the plant, are not the only reason why VW chose Turkey as its new production location.

There are also the low wages, a de facto ban on strikes in the country and the obstruction of the trade unions, which is pleasing from the business point of view. Metal Is, the metalworkers’ union based in the left-wing union umbrella organization DISK, has frequently complained in the past that foreign corporations, including those from Germany, unscrupulously take advantage of the benefits that repression of unions brings them.

Metal Is spokesman Eyup ozer said recently that it "must not happen that international rights and standards of the International Labor Organization ILO and the EU are violated in the new VW factory, as we see again and again in Turkey."

Low wages, fewer rights for workers

Strikes have been banned in Turkey for years on the grounds that they threaten "national security." An EU report last year noted, "Peacefully working union members face threats and arrests." A free choice of which union to join is prevented in many companies.

The result of this repression is low wages even for well-trained people. In comparable auto plants like the one at the new VW plant, the average hourly wage is 2.40 euros, according to Metal Is. Newly hired workers often even receive only the minimum wage of around 1.40 euros. Even if labor costs are no longer the most important factor, these are paradisiacal conditions for companies.

That makes the repression of critics of the regime a little easier to swallow. To the ears of Turkish trade unionists, it sounds like a mockery when VW board member for production Andreas Tostrmann claims: "We will also maintain our standards in Turkey.