Since the 1960s, Germany’s most powerful trade union – the two-million-member-strong IG Metall, or IGM – has locked its works councils, but also its members, into what Germans call the “export model.” This is not only in support of German capitalism, but also a form of system integration, whereby capitalism integrates workers into its apparatus—with the kind assistance of a trade union.
Such a union no longer challenges capitalism but asks for handouts, however meagre they may be. IGM has downgraded itself to an auxiliary of capitalism. Workers, more or less, followed suit.
Yet, threats to working relations in Germany’s metal and electrical industry have been a common feature for decades. Recently, this was cranked up by Germany’s private-jet-loving Chancellor Friedrich Merz, who seeks to end the Eight-Hour Day -a decades-old achievement of not only Germany’s working class.
Meanwhile, the export model of capitalism asphyxiates the interests of the collective and all adjacent parties – like IGM – in the international competitiveness of Germany’s industry as a whole, as well as that of individual manufacturers. Workers and the trade union become a support function of an export-led version of capitalism.
This system suffered a recent shock as the future of this “capitalism-plus-union” model is now on shaky ground. The future existence of a sizable German automotive industry is now basically out of the question. By tying its future to export capitalism, IGM is facing an existential crisis.
Convinced by the ideologues of capitalism that export capitalism would last forever, IGM is not prepared for the looming crisis of Germany’s export model, made visible by the almost daily announcements from corporate car bosses of mass redundancies and plant closures.
A quick look at the works of Karl Marx would have told IGM that capitalism constantly changes. Modern economists call this “creative destruction” – more destructive than creative. Even more interesting is the fact that the concept was popularized by none other than the German economist Joseph Schumpeter.
Yet this is not new. During the 1990s, IGM had to experience how all the other DGB trade unions – in the light of the annexation of East Germany under neoliberal capitalism – totally changed East Germany. The union’s idea of a “socially acceptable reduction” came to nothing as neoliberalism triumphed.
Nevertheless, it was a time when the corporate and media apparatus issued new hope. In the end, everything had started on a new level – so went the prevailing belief.
This was not quite so, as IGM suffered, in 2003, a bitter defeat in a labour dispute in the East German state of Saxony—Germany’s most reactionary state.
In Saxony, IGM faced a new type of manager: West German imports and newly appointed East German managers furnished with arrogance, opportunism and careerism, who saw West Germany’s established model of “social partnership” as unsuitable. Meanwhile, “social partnership” had been the prevailing model of German trade unionism for decades.
However, the internationally acclaimed “German Model” experienced, in the aftermath of Lehman Brothers, yet another escalation of the crisis of capitalism. This time, it was called the global financial crisis.
At that time, Germany’s metal companies – in particular, its auto industry – saw a drastic decline in demand. This did not challenge the prevailing ideology of an export economy inside IGM. Instead, and despite the depth and severity of the crisis, IGM carried on imagining that the crisis was short-term and cyclical rather than structural.
In its interaction with companies, IGM believed that the state would “sit out” the crisis. The foundation for all this was a so-called “crisis corporatism,” in which companies, competition and a coalition of companies with works councils would prevail. This system was further supported by a collective bargaining system based on metal-industry employers and IGM that had, since the mid-1990s, flanked the restructuring of Germany’s automotive industry.
In 2011, IGM was immensely proud of all this, celebrating its “shoulder-to-shoulder” incorporation with industry and the German government. It came with a mix of a car-scrappage scheme to encourage demand for new cars; short-time working arrangements that reduced working hours and wages (Kurzarbeit); and local agreements to support struggling companies.
At the trade union congress in the southern city of Karlsruhe around that time, the deputy boss of IGM celebrated the system of co-determination as a crucial instrument for the sustainability and resilience of companies. What he was praising was the fact that rising demand from China had propped up Germany’s auto industry in 2010. IGM’s business model of massive exports, focusing on high-priced goods, glossed over the looming structural asymmetries. Despite the rising challenge from China, the feeling of “we have been saved” prevailed.
Meanwhile, some even inside IGM started to doubt the sustainability of the export model. In key industries, radical change was becoming more and more imminent. Yet this was not the only challenge.
In October 2010, a high-level IGM apparatchik argued that the future of Germany’s car industry was linked to an “eco-social” transformation of the industry towards an environmentally sustainable economy. This, he said, meant regulation that reached beyond Germany – a transnational regulatory policy.
To achieve both, a comprehensive democratization of companies and economic decision-making was needed. The key stakeholders in this process were trade unions, works councils and workers.
These necessary changes would require overcoming the “business as usual” strategy. It meant fighting “the fossil lobby.”
Around 2010, it marked the point at which a good part of IGM itself, as well as works councils and many employees in Germany’s car industry, were part of this lobby system. In other words, the system had integrated IGM and works councils into its economic structure.
Germany’s car industry could, due to continued marketing and sales success in China, rake in significant profits. This profit-making included the core workforce in Germany’s premium manufacturers – Mercedes, Porsche, Audi, and BMW.
Worse was to come. When the EU wanted to strengthen emission standards in 2013, German carmakers, in their resistance to this, knew that not only the German government but also IGM was on their side. It was corporate lobbying with union support.
Just two years later, the horror of Volkswagen’s diesel scandal – corporate criminality – hit all those hard who still believed in the sheer goodness of capitalism and corporations. Even though IGM was – and is – part of VW’s supervisory board as part of Germany’s much-championed system of codetermination, nobody had “officially” noticed anything about VW’s dirty tricks. None of the hundreds of works council members at VW knew anything – or so it seemed.
As a belated reaction to this, IGM issued a strategy paper in 2015 under the title “Car and Climate – How Germany Gets On,” predicting that the transition from petrol to electric motors would come faster than previously thought.
IGM painted the spectre of hundreds of thousands of Tesla cars in Germany on the wall. Still, according to another IGM functionary, Germany’s automotive industry had a chance to create the best environmental technologies around the car, gaining a superior position in international competition.
By 2018, Germany’s car industry had gradually moved into a crisis as sales of petrol cars decreased while electric cars, by 2025, made up a quarter of all new cars sold worldwide. German carmakers had missed the boat as their beloved export model slipped deeper into crisis.
By 2026, the geopolitical situation (Russia’s war against Ukraine) and the world economic situation (the yellow monster in the White House recently doubting the “Lying King”) had started to change German industry completely.
The era of cheap fossil energy and open world markets had become a thing of the past. IGM’s export model lost its foundations as its leading industry – the automotive industry – skidded deeper into a structural crisis.
Its market in China caved in as Trump’s tariff capriciousness started to bite. Both developments were made worse by a significant gap in innovation in battery technology, software development, and manufacturing, which accelerated the crisis.
Almost all German manufacturers reported substantial overcapacity. Meanwhile, many German car factories became less and less profitable – a key criterion under capitalism. The production of small cars became too expensive.
Adding to that was the elimination of entire supply chains, enforced by the unstoppable transition from petrol engines to electric engines.
All of this had a direct impact on IGM membership. The marked decline in membership, registering about four percent in 2025, is likely to continue in 2026. The already agreed and announced mass layoffs, as well as adjacent plans to relocate manufacturing, are clear indicators of this.
What makes all this worse is that IGM’s practiced pattern of corporatism – the leading ideology at least since 2009 – no longer offers solutions to the current crisis. It no longer works. Instead of securing employment, cutting working hours, factory closures, and massive job cuts are now the order of the day.
At the same time, roughnecks in Tesla’s macho management have, so far, successfully managed to keep IGM out of its Gigafactory. It does not look good for IGM.
The concept of a counterforce is based on the idea that factory-based operational strength in existing companies, and the resulting – at least potential – ability to challenge corporate management, results in “eye-to-eye” negotiations with management within a consensus-oriented collective bargaining model.
Yet IGM’s traditional opponent – Gesamtmetall – has elected as its executive director someone from a company that is not part of Germany’s collective bargaining structure. This collective bargaining structure used to be the stronghold of Germany’s social partnership model, which IGM desperately wants to maintain. Meanwhile, capital is actively working on the destruction of the system.
Worse, there is virtually no automaker left in which union density is at 90% – as used to be the case in the past.
If one looks inside today’s IGM apparatus, one gets the feeling of a mixture of despair and perplexity. As it has been rehearsed for decades, IGM continues to call on the government – the neoliberal-reactionary Merz government – and, of course, on capital to please be nice.
Meanwhile, even IGM is starting to realize that its influence is in steep decline, as IGM’s traditional partner – the social-democratic SPD – becomes weaker and weaker. The SPD is no longer the party of 35% to 45% of voter support. Instead, it has been downgraded to a 10%-party, reaching merely 12% in the Sonntagsfrage (for which party would you vote if next Sunday were election day?) in early August 2026.
In the end, it will be seen whether or not IGM will stick to its export model, spiced up by the ideology of social partnership, or whether IGM will show the will and the ability to engage in larger protests against the austerity policies of the current government, as well as the massive job cuts planned by Germany’s auto bosses.
Things might well heat up in Germany’s car industry – and this is not only because of global warming, with Germany forecast to register temperatures above 40 degrees Celsius (104 degrees Fahrenheit) during next week’s heatwave.
