Every man for himself

English Version of "Mitbestimmung" Article

EUROPEAN WORKS COUNCIL Tensions between the national employee representatives of European aircraft manufacturers Airbus have made it hard for them to come up with a transnational response to the company's globalisation strategy. By Marcus Engler.


MARCUS ENGLER is Hans Böckler Foundation scholarship holder and PhD student at the Berlin Graduate School of Social Sciences and Berlin's Centre Marc Bloch

Following the disputes over the delays in the delivery of the A380 Superjumbo and the fall-off in orders as a result of the recession, it seems that things have now calmed down a bit at Airbus. The world's largest aircraft manufacturer, alongside Boeing, saw its already well-filled order books receive a further boost at the recent Berlin and Farnborough air shows. Orders for some 3,500 new aircraft should secure jobs at the company for at least six years. However, this does not mark an end to the turbulence for the 50,000 or so employees in Europe. Airbus is in the process of reinventing itself. Having completed the integration process within Europe, management announced at the beginning of this year that they are now looking to transform the group into a global enterprise.

Airbus CEO Tom Enders summarised his plans for the group by stating that in future "substantially more work will be performed outside Europe and by external contractors". Horst Niehus, chairman of the Hamburg works council and joint chair of the European Works Council recalls how Enders made it clear to the trade unions that he does not see it as his job to secure employment in Europe. In principle, the trade unions do not actually have anything against this globalisation strategy, as long as the market continues to grow. Indeed, many works council members would even go as far as to say that the decision to move the final assembly of Airbus A320 aircraft to a Chinese operation in 2008 was a good thing - after all, 95 percent of the labour for the aircraft being assembled there was carried out in Europe. Niehus knows only too well that "A situation like we have today, where 99 percent of the manufacturing process takes place in Europe but we sell less than 50 percent of our airplanes on the European market isn't sustainable in the long term, either financially or politically".

Employees of Airbus and its suppliers are, however, much more concerned about the company's low-cost strategy of outsourcing work to countries such as Tunisia and Romania. "This offshoring strategy is getting out of hand. It is creating a great deal of insecurity among the workforce," warns Niehus. Suppliers have been especially hard hit. There is also widespread concern in France, as workers are already being trained for the new plant in Tunisia and French suppliers have been told that they, too, need to establish a presence in North Africa. Unfortunately, according to Jean Louis Belliot of the French CFDT union, unlike their German counterparts, the trade unions in France have had very little influence over which work is transferred to low-cost countries.

A MIXED REPORT FOR THE EWC_ The trade unions at Airbus have certainly been no strangers to conflict over the past few years. Management responded to the delays in delivery of the A380 aircraft by launching the Power8 restructuring plan at the start of 2007. This sought to do away with 10,000 white-collar jobs and sell off several sites. The European Works Council became a key player in the face of this Europe-wide restructuring package. In addition to IG Metall, the EWC also has representatives from the five largest trade unions in France, Britain's Unite union and the two major Spanish trade unions CC.OO. and UGT. However, their first experiment with transnational industrial action met with mixed results. There were some attempts to co-operate at a European level, for example the European Metalworkers' Federation set up a coordination group that included representatives from the various sites, national trade unions and suppliers, all of whom agreed to present a united front to management.

As a result, more than 30,000 protesters participated in a European Day of Action in March 2007, the first of its kind in the aviation industry. The four Airbus consortium countries were joined by suppliers from Belgium, the Netherlands and Romania in calling for all the sites to be kept as part of the Airbus group and for the headcount reduction announcement to be overturned. However, it wasn't long before cracks started to appear in this united front. Disagreements kept surfacing, especially between the French and the Germans. The strong co-determination rights enjoyed by the German trade unions led some French representatives to fear that they would be left out in the cold. They also claimed it was the Germans who had been entirely responsible for the production delays.

The strain of the situation made it almost impossible for the EWC to function properly, and in the end management negotiated the restructuring plan on a country-by-country basis. The trade unions did at least manage to chalk up some successes: they were able to prevent any compulsory redundancies and, at least in Germany, managed to force the company to offer generous severance packages. Furthermore, the number of sites that were eventually divested was not as high as had originally been feared, and while some other sites have been spun off, they will at least initially remain under the umbrella of parent company EADS. Nevertheless, the divestments and spin-offs undoubtedly contributed further to the structural undermining of the workforce's most important asset, namely its unity. The trade unions had already been struggling to recruit members in the supply chain even before Power8 came along.

SPLITTING UP THE WORKFORCE_ Shop stewards Mark Thomas and Mike Byfield had been jointly representing the interests of the 4,500 or so employees at England's oldest aircraft factory in Filton, Bristol for several years. Then, in January 2008, part of the facility was sold off to British engineering company GKN, an important component supplier to the aircraft industry. Now there are two separate companies at the site. The old red-brick buildings on one side of the street are the GKN workshops where Airbus wing components are manufactured and pre-assembled. Mark Thomas is now a GKN employee and represents a workforce of approximately 1,500. The modern buildings across the road are the Airbus facility where the wings are developed and tested. Mike Byfield looks after the interests of the remaining 3,000 Airbus employees at the site.

The reason for splitting the operation up in this way was the familiar cost-cutting rationale whereby less profitable parts of a company are sold off. Workers are forced to accept poorer conditions so that the same services can be bought in at a lower price. Mark Thomas recalls how GKN's management made it quite clear that this was going to be their approach right from the word go. He and his fellow union reps have so far managed to stave off management's attempts to increase working hours, cut pay or erode the terms of the company pension plan. Nonetheless, they find themselves in a difficult position. Even the shop stewards are grudgingly forced to admit that there is at least some truth in management's claims that if the unions continue to oppose these measures the order books will dry up and people will start to lose their jobs. On the plus side, at least management's aggressive attitude has caused trade union membership figures at the site to start rising again.

DISPUTES OVER AGENCY WORKERS_ In Germany, Airbus had intended to sell off several facilities simultaneously. However, the combination of the global financial crisis and workforce protests meant that they were unable to find a suitable buyer. In the end, only the Laupheim cabin interiors plant in Swabia was sold - to the Franco-German Diehl Aircabin consortium. The Augsburg, Varel and Nordenham sites, meanwhile, were transferred to the new Premium Aerotec company, a wholly-owned subsidiary of EADS. The works council managed to obtain guarantees from management that the plants would not be sold before the end of 2011 and that no-one would be made redundant before the end of 2013. A new plant is currently being built in Romania where production is due to begin at the end of the year.

"The pressure to drive down costs increased after the spin-off. They really ratcheted the cost-saving measures up a notch," says Michael Eilers, chairman of the Nordenham works council. However, jobs and social standards have hitherto managed to escape unscathed. Employees have managed to make the contribution to lowering costs demanded of them by the company by increasing productivity - partly by reducing sick leave rates and agreeing to work more flexible hours. Nevertheless, the atmosphere in the workplace has taken a major turn for the worse since Power8.

Johann Dahnken, chairman of the Airbus group works council, says that management's refusal to compromise has unfortunately meant that employee representatives have increasingly had no option but to resort to arbitration and the courts. In mid-August, the dispute surrounding recruitment policy escalated when hundreds of workers in Hamburg organised a protest calling for restrictions on the number of agency workers, which has increased dramatically over the past few years. Airbus' total headcount in Germany currently stands at 21,000, of which 4,800 are agency workers. Dahnken is critical of this policy: "In some areas the percentage of agency workers is as high as 30, 40 or even 50 percent. There is no economic justification for this at all".

THE FIRST STRIKES IN DECADES A_ number of strikes were held in France in April this year following the breakdown of wage negotiations. The French trade unions had refused to accept the pay freeze proposed by management for 2010. After a week-long strike called by all five French trade unions, a deal was struck comprising a 2.5 percent pay rise and a one-off payment of 500 euros.

Some French sites had also been spun off. In accordance with the principle that requires Airbus to treat its German and French sites equally, the group created a French wholly-owned subsidiary of EADS called Aérolia. The Méaulte and Saint-Nazaire facilities and part of the Toulouse design office were transferred to this new company which now also includes a new operation in Tunisia. Pay and social standards have not yet fallen too far behind those at Airbus, but CFDT union representative Belliot fears that the gap is set to widen considerably in the near future.

OLD WOUNDS, NEW CHALLENGES_ After going it alone failed to work, the trade unions in the EWC decided to try and work together again. At least, that seemed to be the case until November 2009, when the time came to elect the EWC's next pair of chairpersons. It soon became apparent that the wounds from previous battles had not yet healed enough to allow the different countries to settle their differences. The German and British trade unions broke with established practice and refused to vote for the French FO candidate. "We can vote for whoever we like, that's how democracy works", says Horst Niehus who now co-chairs the EWC with his British colleague John James. The French felt the process lacked legitimacy, since Airbus employs far more people in France than in the UK. Indeed, the FO representatives even withdrew from the European Works Council for a short time, although they are now back in the fold. The tensions persist, however.

At times of crisis it is often a case of every man for himself, and sometimes in-fighting ensues, which ultimately only benefits management. Yet it was something of a surprise that this should happen at Airbus where, unlike the automotive industry, it is not so easy to play the different sites off against each other. On the one hand this is because they are so highly specialised, and on the other it is because the strong political influence over company policy ensures a balance in terms of employment levels. So what was the cause of all the fighting? The usual obstacles of language problems and an insufficient understanding of different industrial relations systems and their specificities were at least partly to blame. But it is important not to underestimate the toxic impact on efforts to promote transnational co-operation that results from alliances with political actors seeking to attract globalisation-weary voters with nationalistic economic policy slogans.

Management's strategy is perfectly comprehensible - they argue that they need to implement the changes now that will enable them to continue to ward off growing competition from China and Russia in the future. The trade unions have a much more difficult task. They need to convey to employees at a local level that the only strategies that can succeed are transnational ones. Long-term structural weakness is too high a price to pay for short-term job security. If they fail in this task, there will still be a dwindling core of highly-skilled employees in Europe for whom things will continue to be OK. However, the number of people working in insecure working conditions either for temporary employment agencies or suppliers will grow. And this trend will affect Hamburg, Toulouse and Filton alike, and will not be confined to employees of Airbus either.

Everyone knows there is only one possible way to move forward, even the Force Ouvrière representatives who briefly refused to participate in the EWC. As their leader, Jean-François Knepper puts it, "We need a European strategy now more than ever. If all we do is defend our own corner, then we've lost before we even start."