In May, thousands of union members took to the streets of Bochum, Hanover, and other German cities to protest Chancellor Gerhard Schröder's plans to roll back job protections and unemployment benefits. But one prominent union leader was not among the angry throngs. Hubertus Schmoldt, president of the 820,000-strong chemical workers' union, known as IG BCE, was on his way to an international labor congress in Prague.
His absence wasn't an accident. Schmoldt was the first leader of a major union to back the Chancellor's Agenda 2010. "If it doesn't pass, that will be proof that Germany is incapable of reform," he says. "That's the worst thing that could happen."
Schmoldt's view is that Germany needs to loosen its rigid labor rules to spur job creation and ease unemployment, now approaching 11%. Since he is highly regarded by both labor and business, his backing has allowed Schröder to consolidate support for reforms within his Social Democratic Party. "If Agenda 2010 passes, it will be due in no small part to Schmoldt. He has played an important role behind the scenes," says Hans-Dietrich Winkhaus, president of the Cologne Institute of German Economics, a think tank. Parliament is expected to approve the reforms by the end of the year.
While other German labor leaders prefer noisy confrontation, the 58-year-old machinist is known for quiet compromise. Schmoldt concedes that the IG BCE rank and file are sometimes frustrated by his low-key approach. But the union, which also represents miners and workers in the energy industry, has a tradition of moderation. It has kept wage demands in line with productivity increases and allowed sick companies to cut wages. Admirers of Schmoldt say he has helped slow the export of jobs to cheaper locations overseas. "We have to be willing to change," he says. Such a pragmatic approach may be key to Germany's economic revival.