Germans Brace for Longer Workweek

With three high-profile German companies having already used strong-arm tactics in recent weeks to reach deals with workers to extend the workweek in return for job security, employees at smaller German companies are bracing for radical working practice changes to hit them too.

The number of companies that have announced plans to negotiate for longer working hours with no compensation has increased, said Rudolf Welzmüller, a collective bargaining specialist at IG Metall trade union.

Deals sealed by Daimler Chrysler, Siemens and Bosch will see workers put in more time without extra pay. These agreements must be copied by other employers if Germany was to thrive, said Dieter Hundt, President of the German Employers' Association, on Wednesday as he presented BDA's assessment of the 2004 pay round. “We must achieve more and work longer if we want to remain prosperous and retain our culture of social protection,“ he said during the speech on Wednesday.

“Rigid workweeks are not what's needed. It's about creating flexible, long-term working hours with corresponding overtime accounts,“ Hundt said.

Flexibility is also the catch-cry of politicians responding to the reforms in Germany's workplace. Chancellor Gerhard Schröder in past weeks stressed that a blanket change would not suit the needs of every industry, while a more flexible approach would. “It is more important to make working hours more flexible,“ he said in an interview with Spiegel newsmagazine.

Flexibility in the cases so far has meant longer working hours. The attempt to move workers back to a 40-hour workweek is foremost among the measures taken by companies looking for ways to lower their labor costs.

Siemens got the carousel going in June by forcing the country's powerful IG Metall trade union into getting plant workers to work longer for no compensation. Siemens threatened to move 2,000 jobs to Hungary if workers did not agree to abandon the 35-hour workweek.

The threat of moving jobs elsewhere has become an increasingly powerful weapon for industry at the negotiating table. Daimler Chrysler used the same tactic to persuade its staff to work longer hours. After two weeks of protests and strikes, Daimler Chrysler reached an agreement on July 23 that will save the carmaker €500 million in annual labor costs. In return, the carmaker said it will guarantee jobs at the Sindelfingen plant near Stuttgart until 2012.

In mid-July, workers at a Bosch car parts factory near Lyon agreed to work 36 hours per week in return for the company's promise not to move jobs to the Czech Republic. Earlier in the year, workers at BSH Bosch und Siemens agreed to forgo perks not included in the union pay deal to keep jobs from being exported to Turkey.

Echoing statements made by the chancellor, Economics Minister Wolfgang Clement greeted the Daimler deal as a “victory for common sense,“ that helps strengthen Germany's economic revival. Schröder also said the deal would set a precedent for savings negotiations at rival carmaker Volkswagen. Wage agreement negotiations are upcoming in late summer at both Volkswagen and Opel. The writing is already pretty much on the wall. VW's largest shareholder, the state of Lower Saxony, has demanded longer working hours with no compensation. Under its current pay agreement, VW won't be able to guarantee its roughly 160,000 jobs in Germany, state premier Christian Wulff told the Berliner Zeitung.

Smaller companies, seeing the success enjoyed by their high-profile cousins, are keen to climb on the bandwagon. “We detect a trend of companies attempting to lower labor costs by jacking up working hours,“ said Gustav Horn, chief economist at left-leaning DIW economic institute. “Lowering labor costs isn't a lucrative strategy in the long run,“ Horn has said.