Anyone running against Viktor Orbán’s party knows more or less what they are getting themselves into. But what she recently found about herself in the form of claims on Facebook was a new low point in the election campaign: “You posted a picture of me saying I wanted to shut down the German car factories in Hungary.” Alexandra Bodrozsán of the liberal Momentum movement is the candidate for Kecskemét by the six-party opposition coalition that is running against Orbán’s Fidesz party next Sunday. The city in south-central Hungary is a strategically extremely important place for Orbán. So it’s no coincidence that Fidesz deliberately stirs up fears and fabricates allegations that a victory for the opposition would see one of the country’s most important employers disappear.
Kecskemét is a Daimler city. The German group set up its first plant in another European country here in March 2012 and has been producing A-class vehicles since 2018. Alexandra Bodrozsán says it is of course complete nonsense that she wants to scare the company away from here: “Mercedes is an asset to Kecskemét,” she says. And should she win the election, she would definitely rely on a “good partnership” with the group and its suppliers. However, she would “make sure that the city also shows that it is the location of a luxury car manufacturer”. That would mean something like: fewer holes in the streets, better street lamps, a presentable train station. “The standard of living should actually be much higher here,” says Alexandra Bodrozsán.
If you ask in the town hall, it sounds quite different. Workers from all over Hungary come to Kecskemét, says Klaudia Szemereyné Pataki, the mayor of Orbán’s Fidesz party. In addition to the approximately 4,700 employees at the Mercedes plant, about as many are employed by the supplier companies, “and the fluctuation in the sector is very low”. The wage level has risen significantly thanks to German companies. And thanks to the transformation of the university into a foundation – a step that was sharply criticized by the opposition – the workforce could be “trained and retrained quickly. In this way, it is possible to react flexibly to the needs of companies”.
Auto industry generates a tenth of gross domestic product
For Viktor Orbán, the presence of the German car companies in the country is an essential pillar of his economic policy. Manufacturers and their suppliers generate a good tenth of Hungary’s gross domestic product and a fifth of exports. The promise of a “reindustrialization” of the country was part of Viktor Orbán’s campaign that helped him win the 2010 election. The German car manufacturers, who were looking for cheaper production sites, were to play a key role in this.
In many Central and Eastern European countries, industrial tradition and low wages come together, which is why a car industry has developed almost everywhere since reunification. However, according to a large German car company, Orbán is pursuing “a particularly active and clear location strategy”. BMW also recently decided in favor of Hungary: the construction of an electric car plant is about to start in Debrecen, but competitors such as Košice in Slovakia are not getting a chance. According to BMW, the funding alone was not the decisive factor, it is also about qualified employees and last but not least the situation, specifically in Ukraine, even if that seems strange these days. Because the German car industry obtains many parts from places where labor costs are much lower.
The Fidesz government has courted Mercedes, Audi and BMW since 2010 with low tax rates and massive subsidies. By 2020, Budapest had paid more than 230 million euros in direct subsidies to German manufacturers alone, reported the investigative portal Direct 36. And with reference to the grants, Prime Minister Orbán likes to avoid criticism from the other EU states of his political leadership: “The Germans and also the other member states make a lot of money from us,” he said in a speech around 2018 an event organized by the Konrad-Adenauer-Foundation in Budapest, “it is neither worthwhile for them nor for us to complain.”
With subsidies against the Corona crisis
But there has been a lot to complain about recently: the Corona crisis caused car production to collapse massively in the first half of 2020 – and the government countered this with additional subsidies. In June 2020, Orbán visited the Audi plant in the western Hungarian city of Györ, one of the largest engine plants in Europe, and said: “We will not just survive this crisis, we will come out of it stronger.” The Chairman of the Board of Management of Audi Hungaria, Alfons Dintner, praised “the commitment of the Hungarian government, which is actively driving the revival and restart of the economy with numerous economic stimulus measures”. However, there has not yet been a meeting between Audi boss Markus Duesmann and Orbán. The company says they don’t want to be drawn into an election campaign.
In the Corona crisis, the government not only grabbed the subsidy pots, but also made tough cuts in labor law. By decree, for example, she stipulated that employers could send their employees on unpaid leave. At the major car locations, the Vasas union, which cooperates with the German IG Metall, was able to prevent the decrees from being implemented in its negotiations with the companies – as did a change in labor law passed in 2019, which critics dubbed the “slave law”. is called: According to this, employers can order significantly more overtime and make working hours much more flexible than before. There are indications that the government met the wishes of some German companies in the country with the law.
Qualified workers are scarce in Hungary
What has strengthened the position of the workers’ side so far: Qualified workers are scarce in Hungary – according to critics, this is also a result of the anti-immigration policies of recent years. And: “The border is very close, many young people go to Austria to work because they simply earn better there,” says Ákos Molnár, regional secretary of the Vasas trade union in Györ. In Kecskemét, where the salary level is slightly lower than in Györ, according to Vasas calculations, employees in the auto industry earn on average about a quarter of the salary in Germany, depending on the position.
In Györ on Sunday, the Social Democrat Zita Jancsó will stand for the opposition alliance against Fidesz. She doesn’t really know what the political opponent is saying about her and her supposed attitude towards the auto industry on social media, she says with a smile: “I have an employee who takes care of it.” In any case, it is important to her that if she wins the election, she would continue the city’s “successful partnership” with Audi.
Zita Jancsó says Fidesz has no reason to take credit for the success of the Hungarian auto plants: When Audi started producing engines in Györ in 1994, her party provided both the mayor and the national government in Budapest. “And it was the Social Democratic Prime Minister Ferenc Gyurcsány who brought Mercedes to Kecskemét in 2008.” That alone shows, she says, that if the opposition wins the elections, nobody here needs to fear losing their jobs.