DaimlerChrysler boosts working week debate

13th July 2004, Comments 0 comments

13 July 2004 , STUTTGART - A warning by automotive concern DaimlerChrysler that it could cut 6,000 domestic jobs unless employees agree to major cost-saving measures triggered controversy around Germany on Tuesday in the sharpening debate about rollbacks in labour. Unions raised the alarm about the prospect of workers having to give ground on some hard-won job and wage benefits which had long been taken for granted in Europe's largest economy, while industry analysts said rollbacks can make German carmaker

13 July 2004

STUTTGART - A warning by automotive concern DaimlerChrysler that it could cut 6,000 domestic jobs unless employees agree to major cost-saving measures triggered controversy around Germany on Tuesday in the sharpening debate about rollbacks in labour.

Unions raised the alarm about the prospect of workers having to give ground on some hard-won job and wage benefits which had long been taken for granted in Europe's largest economy, while industry analysts said rollbacks can make German carmakers more competitive.

DaimlerChrysler wants to cut costs by EUR 500 million a year in savings measures which it needs employee consent for, chiefly in worker concessions in their holiday and Christmas bonuses and in overtime pay.

Without an agreement, the company warned, it could cut around 6,000 jobs at a main production facility at Sindelfingen, near Stuttgart starting in 2007.

Then, the company would consider transferring production of the next generation of "C"-class Mercedes cars elsewhere - including to East London, South Africa, personnel boss Guenter Fleig warned.

This prospect drew angered comments from Ursula Engelen-Kefer, deputy chairman of the German Trade Union Federation DGB in Berlin, who described Fleig's statement as a "scarcely bearable warning and threat" which posed an "extreme demand" in the working hours debate.

"I can only hope that the path back to reason can be found," she added, saying that unions are being cooperative in the issue of more flexible working hour arrangements.

The country's most prominent automobile industry official, Bernd Gottschalk, also argued against a transfer of jobs outside Germany.

Gottschalk, president of the German Automobile Manufacturers Federation VDA, which was meeting in Stuttgart for a symposium on research and development, said the car industry must stand behind Germany as a site of production.

"We oppose the erroneous idea that one can transfer production to low-wage countries while concentrating in Germany on the employment of engineers in research and development," Gottschalk said.

But a leading automobile industry expert, Gelsenkirchen Technical University professor Ferdinand Dudenhoeffer, said rollbacks will be necessary to help German carmakers to compete.

Only by extending the working week to 40 hours - from the current 35 hours now in effect under the landmark deal won by the metalworkers union IG Metall 20 years ago - can carmakers assure their competitiveness, he told Deutsche Presse-Agentur dpa.

"Only in this way can it succeed that jobs can be held steady in comparison to Eastern Europe," Dudenhoeffer said.

He said the Gelsenkirchen Technical University had calculated that over the past 15 years around 100,000 German automotive jobs had emigrated to Eastern Europe, where companies are enticed by lower wages and lower taxes. In Hungary, taxes are only half those in Germany, Dudenhoeffer noted.

In the meantime, worker qualifications have improved, so that "today the quality of production there (Eastern Europe) is often higher than here at home", he said.

DaimlerChrysler's bid to win wage and cost concessions from its employees follows on the recent deal reached between electronics giant Siemens and its employees represented by IG Metall.

In that deal, workers agreed to longer working hours at no extra pay and to cutbacks in bonuses so as to rescue 2,000 jobs and for Siemens agreeing not to transfer mobile phone production from two German plants to Hungary.

In a commentary, the daily Die Welt said the DaimlerChrysler thrust is only the beginning of the trends foreseen in the German car industry. Workers at Volkswagen and GM subsidiary Opel must also brace for "painful cuts in the months ahead".

The German car industry's situation is now characterised by competitive and qualitative advantages enjoyed by foreign carmakers, a stagnant home market and overcapacity of around 20 percent at automotive plants, Die Welt noted.

For the moment, German car firms were not seeking "radical solutions", the commentary said, but instead were starting to cut back on such "extras" as overtime pay arrangements and holiday and Christmas bonuses.

"But if there is no economic turnaround, then the employees in the largest industrial sector face tougher times," Die Welt commented. "Then just cutting the extras will no longer be enough."

DPA

Subject: German news

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