International Business: GERMANY
FROM ASSEMBLY LINE TO PICKET LINE?
Germany is not the only country in Europe where worker-employer strife is brewing. In Britain, tensions run high between unions and management at Ford Motor Co. and General Motors Corp.'s Vauxhall division. In Italy, Fiat's auto workers want a bigger piece of the pie after a three-year wage freeze. Workers in both countries say it's payback time after years of achieving major productivity gains at little extra cost to employers.
The threat of strikes is strongest in Britain. There, at Vauxhall Motors Ltd., two important unions have staged a limited job action since November, slicing two hours off their workweek and cutting production by 280 cars a week. At a Jan. 4 meeting of the rank and file, a nonbinding vote showed most opposed the company's latest wage offer, which includes a 4.5% pay rise for the first year. A second vote by secret ballot will officially decide whether the unions accept or reject the offer.
"MUCH TOO STEEP." At Ford's British plants, 22,000 union members are due to vote by mid-February on whether to begin industrial action. Ford workers already signaled their unhappiness in December by rejecting a 9.25% wage boost over two years. The unions claim that they have slashed the time required to build a car by 40% at Vauxhall and Ford, only to see their inflation-adjusted wages go up a mere 4% since 1990. Labor negotiators also want a cut in the workweek from 39 hours to 37. Ford and Vauxhall say their offers are fair and reflect increases in productivity and that they cannot afford a two-hour cut.
At Fiat, rebounding profits have prompted union workers to ask for what would be the first real wage increase in Italy's manufacturing sector since mid-1992. Workers want average take-home pay to increase by 11% a year for the next four years. Fiat says the union demand is "much too steep" but that some sort of compromise over pay is likely.
Both the British and Italian unions are inspired by the big wage boosts won by Germany's IG Metall last year. For carmakers, the German precedent is scary. At $39.55 an hour in wages and benefits, German auto workers are the most expensive in the world. Says Professor D. Garel Rhys at the Center for Automotive Industry Research at Cardiff University: "Companies are worried that Britain could go down the same slippery slope that Germany has gone down." GM boss John F. Smith Jr. said at the Detroit motor show on Jan. 5 that the British labor talks at Vauxhall had "prompted senior management at General Motors to ask, `Is this the place we really want to invest?"'
The threat of labor unrest only adds to the problems of the region's auto industry. European auto sales rose a barely perceptible 0.6% in 1995, and sales this year are projected to grow an anemic 3% against a weak base. Slow sales are not softening British workers' demands. They note that their auto companies have prospered in recent years and that with unemployment still falling in Britain and the labor market tightening, it's only natural that workers get a better deal. "I'm very pleased that Vauxhall makes profits. But now I want something in return," says John K. Cooper, an employee at the company's plant in Ellesmere Port. Like it or not, auto executives will soon see just how far Cooper and other workers are ready to go in staking their claims.By Heidi Dawley in London, with Silvia Sansoni in Rome