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Magna workers' pay slashed

Magna is asking employees who are not already doing part-time work to take voluntary pay-cuts based on the size of their salaries in an effort to cope with the recession.

Magna is asking all European employees who are not in part-time work to do so, but the request affects 3,500 of them in Styria. Some 4,000 Magna employees at Graz and Albersdorf are doing part-time work that has effectively lowered their incomes by 10 per cent and will not be asked to take voluntary pay-cuts.

Magna-Europe CEO Siegfried Wolf said yesterday (Thurs): "We have really tried to set up a scale of pay-cuts from bottom to top – five, 10, 15, 20 per cent." He has agreed to relinquish 50 per cent of his salary.

Wolf said such a measure was necessary to enable Magna to survive the recession, with Magna Steyr, for example, expected to produce only 60,000 cars this year compared to 250,000 last year.

Wolf added the pay-cuts would last for one year and there would be no sanctions against any employee who refused to take one. He added he expected arrangements for voluntary pay-cuts to be completed within two-to-three weeks.

In response, Günter Pepper from the Magna workers’ council said: "We are ready to engage in talks about savings, given the economic situation, to find a solution acceptable to everyone."

Graz economist Michael Steiner called Wolf’s proposal "a radical measure" that should be very short-term.

Styrian Social Democrat (SPÖ) social councillor Kurt Flecker said he thought other firms in Styria might follow Magna’s example. He suggested Magna give employees who took voluntary pay-cuts job guarantees.

Wolf, however, nixed that suggestion, saying: "We have to be realistic. No government, no union and no management in the world can provide job guarantees."

Magna Steyr and Magna Heavy Stamping had already announced workers would have to stay in part-time work weeks longer than expected before Wolf’s new proposal.

The two firms - Magna Steyr in Graz and Magna Heavy Stamping in Albersdorf bei Gleisdorf, also in Styria - said recently they had notified the Labour Market Service (AMS) they would keep employees in part-time work through October 2009.

The firms said the reason for their decision was the continued difficult situation in the auto industry and a decline in orders for products produced by Magna Steyr in Graz.

It isn’t the first time a Magna firm in Styria has had to dismiss workers or keep them in part-time work. Magna International in Graz laid off 350 workers last autumn.

In response, the Styrian government contributed 490,000 Euros to a support fund for the workers.

Styrian SPÖ Governor Franz Voves said the job cuts "were expected", bearing in mind the uncertain global market the company had found itself in.

Magna International, founded by Austrian Frank Stronach in 1957, also let 350 agency workers go.

The two firms - Magna Steyr in Graz and Magna Heavy Stamping in Albersdorf bei Gleisdorf, also in Styria - said today (Mon) they had notified the Labour Market Service (AMS) they would keep employees on part-time work through October 2009.

The firms said the reason for their decision was the continued difficult situation in the auto industry and a decline in orders for products produced by Magna Steyr in Graz.

It isn’t the first time a Magna firm in Styria has had to dismiss workers or keep them in part-time work. Magna International in Graz laid off 350 workers last autumn.

In response, the Styrian government contributed 490,000 Euros to a support fund for the workers.

Styrian Governor Franz Voves said the job cuts "were expected", bearing in mind the uncertain global market the company had found itself in.

Magna International, founded by Austrian Frank Stronach in 1957, also let 350 agency workers go.

Austrian Times


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