Central Europe's Unions Start To Act Like Unions

Fourteen years ago, an eloquent electrician with a drooping mustache galvanized workers at Warsaw's Gdansk shipyards, prompting the beginning of the end of communist rule in Poland. That was Lech Walesa's Solidarity. Today in Poland when unionized steelworkers clang helmets on the pavement, coal miners carry coffins, or auto workers lay down their tools, the focus is more likely to be pocketbook issues: money and jobs.

Throughout Central Europe, where trade unions spent 45 years propagating the myth of a worker's paradise, labor leaders are changing their tune. They're pushing for a bigger say in corporate, social, and economic policy--and they're starting to call strikes to back up their demands. "We have seen a dramatic change in the functions these unions are performing," says Robert Kyloh, industrial relations expert at the International Labor Organization in Budapest.

SOCIAL PACTS. That's not to say Central Europe will convulse with picket lines and lockouts. Union membership, once virtually mandatory, is now 40% to 50% of the workforce. With unemployment rates topping 12% in the wake of massive restructuring, many are simply grateful for a job. With numerous companies teetering in the red already, and economic growth just now picking up in Hungary and the Czech Republic, there's too much at stake to risk militancy. Continuing the concept of a social pact, government, labor, and employers have formed commissions to codify laws and set up mechanisms for collective bargaining.

Yet foreign investors and domestic managers alike are confronting a swelling activism. In selling off their holdings, governments often insist on guaranteed employment levels for one or two years and a five-year investment plan. Some deals include generous benefits. One confectioner even agreed to preserve the practice of letting workers take home two kilograms of chocolate per month. "You've got to manage the human side when closing a deal or you run into problems," warns Noah Gotbaum, director of London-based advisory firm Central Europe Trust.

There has been a flurry of disputes. A two-month strike wracked the Lucchini steel works near Warsaw this summer because the Italian buyers didn't modernize as quickly as promised in return for wage concessions. In September, Fiat workers in Poland walked off the line to demand a $96 raise on a $300 average monthly wage and an equity stake in the company.

Volkswagen is running into problems at Skoda, outside Prague, as the union opposes plans to lay off 850 workers this year. Lubomir Stencl, vice-president of the Metal Workers Union, says he doesn't like strikes but is prepared to order work stoppages at Skoda if necessary. "Unions tried to be sensitive in the transition," he says. "Now that we have private ownership, there's less reason to worry about keeping social peace."

WESTERN TIPS. Investors are also facing savvier workers who have picked up a few tips from their Western counterparts. When the state aluminum factory was to be privatized in 1992, the Hungarian Chemical Workers Union solicited advice by E-mail from unions around the world before deciding to support Aluminum Co. of America's bid.

Most of the conflict arises in previously state-owned companies. In Poland, militant trade unionists such as Zygmunt Wrzodak at tractor maker Ursus are contributing to delays in privatization. He has led strikes to repel attempts to sell the company, insisting that 50% of it be handed over to the workers. By contrast, new private enterprises are rarely unionized, and investors in greenfield sites tend to pay well and not run into trouble.

Poland, because of history and temperament, has seen the most flare-ups. Solidarity's glorious past has spawned 220 national unions and over 1,500 local ones, but its own membership has plunged from 10 million to 1.2 million while the communist OPZZ union still claims 5 million. Solidarity's leaders are struggling to hash out just what kind of a role they should play. "Some people still think we should take care of everything from police to poetry," says Maciej Jankowski, chairman of Solidarity's Warsaw chapter. "We accept our great limitations." He plans a training program in negotiating tactics for 300 activists while lobbying for a voice in privatization deals and social security schemes.

With electrician-turned-President Lech Walesa coming in dead last in popularity polls of potential candidates for next year's presidential election, "the main trouble with Solidarity is that it's no longer relevant as a political force," argues sociologist Sergiusz Kowalski. As a trade union, though, it has a chance now to help set the guidelines for the new market economy.

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