On Wed, 22 Aug 2001, James Heartfield wrote:
> Try as I might, I cannot recognise much of Europe in Dennis's
> description. At best it corresponds to a European social democracy of
> thirty years ago (which, may it be said, was not a pro-working class
> political establishment, but a statist-capitalist one).
What you say is true, James. And yet, while German unionism is not what it used to be, as described in the article below it still seems to very different from life for workers in Blair's Britain or in the US. (I was also struck, because of recent discussions, with how, for better or worse, time-sharing solutions that seem completely utopian in the US seem to be just business as usual in Germany.)
WORLD NEWS - EUROPE: Works councils help ease the pain of economic downturn
Financial Times, Aug 14, 2001
By BERTRAND BENOIT and HUGH WILLIAMSON
When Infineon, the German chipmaker, said recently it would shed 15 per cent of its workforce, investors rushed to buy its shares, praising the company's aggressive response to the current downturn in world markets.
But for Infineon's workforce the announcement was not the signal for sudden mass lay-offs. Instead, management and unions have now embarked on a complex horse-trading exercise that could yet see many of the jobs being saved.
Despite the slowdown, Germany's traditional consensus-based approach to lay-offs remains firmly in place. This system, which prefers moves to cut costs without significant dismissals, has broad backing from employers' groups and unions. Before compulsory redundancies are considered, other options must be exhausted.
At Infineon, Alfred Eibl, head of the employees' works council, hopes that instead of cutting jobs the company will opt to reduce its payroll through a shorter working week and lower wages. He claims the cost-savings will be identical.
Workplace-based works councils such as his, composed of elected employee representatives, have considerable influence in negotiations with management over necessary cost savings or lay-offs -- powers derived from legal provisions and from the usually close day-to-day co-operation between works councillors and senior managers.
Georg Jaeger, a labour law expert at Shearman & Sterling, says: "A works council cannot block the implementation of job cuts but it can considerably delay the procedure."
Manfred Weiss, law professor at Frankfurt University, adds: "It was never difficult for companies to make employment-related savings, despite what people say about Germany. Companies just have to follow procedures."
Under German law, companies have a duty to inform their workers of any savings plans and to put forward solid justifications.
Of the 10,000 job cuts announced by Siemens this year, only a small minority are likely to be redundancies, with the bulk coming from early retirement, retraining, redeployment within the group, and reductions in working time.
If redundancies still remain necessary, management may go ahead with the cuts but must provide financial compensation and retraining opportunities through a social plan agreed with the works council. The council also has to approve the list of workers made redundant, based on criteria which reflect broader social concerns rather than efficiency targets.
"In practice (a company) may have to get rid of the younger, more skilled and more motivated workers," says the head of human resources at a large German company. "Which can prove counterproductive."
One way companies have sought to bypass strict labour legislation has been by using more temporary workers and fixed-time contracts.
The 2,600 cuts announced by Siemens in its mobile phone division, or 10 per cent of the unit's workforce, will come entirely from the non-renewal of such contracts.
Another method used by German multinationals has been to cut employment in operations outside the country, where procedures are looser. Siemens' communication network division, for example, is planning plant closures in Indonesia, Vietnam and China.
Mr Weiss says that, despite complaints from some companies, regulations regarding redundancies have not been significantly tightened since 1998, when Chancellor Gerhard Schroder's Social Democrat-led government came to power.
Klaus Brandner, the SPD's parliamentary spokesman on labour relations, says that despite the government's close ties to trade unions, the party has no plans to follow recent developments in France by making redundancies even more difficult.
Unlike France, Germany has a history of handling corporate downsizing with little confrontation. Mass redundancies in the steel industry in the 1960s and in many eastern German companies in the early 1990s sparked little conflict, once social plans were agreed.
Strikes are very rare - under German law these are only allowed in connection with pay negotiations - but union pressure sometimes brings results.
Deutsche Post this month cancelled plans for 3,000 redundancies after unions announced protest action.
Defenders of the current system still argue that what German companies lose in flexibility they gain in improved long-term employee relations. "When redundancies do occur, employees accept them as they know all options have been tried," says Mr Weiss.
Mr Eibl of Infineon agrees: "Our company's motto is 'we win together' and we keep that in mind."
Copyright: The Financial Times Limited
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com