Anti-capitalism and mass redundancies in Germany, 2005

Prol-Position on a series of mass job cuts across different, mostly high-tech manufacturing corporations across Germany in 2005.

Submitted by Steven. on January 5, 2010

Locusts, ‘Anticapitalism’, Kirgisian Lessons and Governmental Crisis
Germany, spring/summer 2005: The German social-democratic government is finished, or at least that’s what it looks like in July 2005. After years of restructuring the welfare state, the government is caught between two frontlines: an increasing discontent among its traditional membership on the one hand, and the lack of employment creating investments of the employers on the other. The enormous defeat of the SPD (Social Democrats) in its remaining strong-hold, North-Rhein-Westfalia, during the federal elections in May 2005 was the final straw: the government declared early national elections for the coming autumn and all surveys are sure that the SPD will lose them. The decadence accelerated in July: The ‘social democratic’ car-maker VW (Schroeder was a member of the supervisory board, his main economic consultant Hartz was the leading VW manager) was involved in a major corruption scandal, shadow companies have been set up and the works council has been bribed with expensive trips and prostitutes. Manager Hartz, strategist of the main welfare-state reform of the SPD government, has to go.
A reaction to the governmental crisis has been the re-emergence of the populist wing of social-democracy: the left-wing of the SPD started the so-called ‘anti-capitalism debate’ in early spring, comparing (mainly foreign) investors with locusts, and after the elections in North-Rhein-Westfalia the PDS (Party of Democratic Socialism) and the WASG (Election Alternative for Social Justice) joined under the re-emerged leaders Oscar Lafontaine, who recently left the SPD, and Gregor Gysi. The (probably) future governmental party CDU (Christ Democrats) seems everything but united and prepared for the reigning position it will be pushed in.
The ‘anti-capitalist’-debate instigated by the left-wing of the SPD is not only mere populism. The state has the real problem that although it pushes the limits of possible welfare and wage cuts the investment climat didn’t change. We would have to analyse the actual re-composition of capital and the different strategies of the (political) management to attract and encourage more productive investments, e.g. lower taxation for companies, the new German-Chinese links, the outsourcing towards the east, the tendency to create Franco-German ‘european’ companies etc.. The official focus when trying to explain the dilema was on only one of these different developments: The SPD government’s strategy to attract foreign capital, mainly from the US, failed. US companies did invest, but only on a short-term basis, often dismantling the existing companies and selling the profitable parts. As a powerless reaction the left-wing of the SPD set up a so-called black-list of investors, such as Blackstone, KKR, Carlyle, Lone Star, Terra Firma, Apax, Cinven, Investcorp, Permira. ‘Capitalist’ in the social-democratic sense means that the profits of these companies are not combined with creation of durable jobs, rather result in vast redundancies at ‘German companies’, e.g. Siemens-Nixdorf, Telenorma, MTU, Gerresheimer Glas, Dynamit Nobel, Rodenstock, Celanese, Minimax, Demag, ATU Autoteile Unger, Debitel, Tank & Rast, Duales System.
The reaction to the ‘anti-capitalism’-debate isn’t surprising. The liberal forces and official spokes-persons of the employers use ‘lefty’ arguements in order to defend their market ideology: they state that the comparison of ‘capitalists’ with ‘locusts’ resembles anti-semitic propaganda, is truely anti-american and will isolate Germany further from possible investors. The official left (within the unions, in the various communist parties and splinter groups) seems to be trapped given that they more or less share the ‘vulgar anti-capitalism’ which demands employment from investments.
We want to summarise some recent conflicts that were kicked off by the redundancies, closures and re-locations. In May/June 2005 there were several companies affected at the same time. We can’t statistically say if there is an upturn in actual re-locations and closures (see the article Going East in ppnews #2, 5/2005), but the social atmosphere at least seems to be more and more characterised by these kinds of conflicts. In July 2005 the media publishs that the total number of ‘regular jobs’ (social security, pension contribution etc.) shrank by 10 percent during the last twelve years, by 25 percent in the east. So far, the workers involved rarely go beyond the usual symbolic reactions of demonstrations, petitions and united fronts against the redundancies, although there have been a few strike actions as well. In this aspect, the critique of ‘solidarity initiatives’ in the text of Mouvement Communiste (see article in this issue) is adequate. We think that two factors could become more interesting in the future: in most cases, initiatives against the threat of closure develop on the shop-floor level, with workers often organsing their own websites, meetings, etc. There are also attempts to coordinate these initiatives, although this hasn’t really happened yet. The other factor is the international dimension. Different from e.g. the closures of the coal mines, ship yards and steel works in the 70s and 80s this time the closures happen in a tighter net of international production. Often the bosses threat with re-locations to the Czech Republic or Poland, which isn’t actually that far away, and often several locations are effected at the same time, e.g. Alsthom in France and Germany, Samsung in Germany, Spain and the UK. Let’s bear in mind that this economic and political situation isn’t confined to Germany: under the crisis the EU as a whole seems to be desintigrating politically, unable to fullfill it’s stability pacts or to agree on a common way out of the dilema (symbolic expression: the constitution debacle).
That the situation are potentially explosive isn’t only an illusive product of our communist principle of hope. In May 2005, in the inofficial German organ of capital, the daily FAZ, the SPD-strategist Glotz asked an interesting question: ‘What kind of means of mediation can Germany count on in case of wider social unrest?’ Following a quotation:
‘A fact is: German discipline and peace could turn out to be deceptive. A new RAF (Red Army Faction) is not within view. But if 200 workers, sacked even though their company was profitable, went on a rampage and destroyed everything, this single violent erruption could lead to an extensive fire like the unpolitical attempt to kill Rudi Dutschke on Easter 1968. This is the ‘Kirgisian Lesson’. The resistance in Kirgisia is the reaction to the resistance in Ukraine, which will be the trigger of several more revolutions in Eastern Europe. Germany is not Kirgisia, Germany is a constitutional state with a functioning state machinery and a good police force. But will all this be sufficient?’
Below, we look at some of these potential Kirgisian sparks. We have to admit that most of the information we have is taken from the media and union sources and we only managed to visit the protest at Kone. The following short summaries remain therefore somewhat superficial, but nevertheless they should give an impression of the recent atmosphere. At the moment we can only state the absolute non-existence of any international debate or practice arising from these attacks from a revolutionary/communist perspective, something which will surely turn out to be a fatal mistake.

The French multi-national company is officially in crisis, and made a 400 million euro loss in the financial year 2004/2005, which adds to its total debt of 3.9 billion euros. A year ago the company would have had to declare bancruptcy if the French state hadn’t jumped in with a 3.2 billion euro financial aid package. The European Union only agreed to that inofficial subsidy under the condition that Alsthom sells certain branches of the company. Siemens is one of the potential buyers. The whole deal would result in severe job losses, and not just in France. There are rumours of relocations to China, India and Mexico.
In May 2005, workers in Mannheim/Germany started their protests against the 900 planned job cuts -- the whole plant (generators, turbines) employs 2,000 people. In Stuttgart another 150 to 200 jobs are at stake. The reaction in Mannheim was to organise a series of ‘company assemblies’ or ‘information meetings’. Given that strikes would be illegal, the works council called instead for such info-meetings. On the 29th of May, after five days of ‘strike’, the management succeeded in banning the ‘information meeting’ via a labour court. The works council gave in and agreed to reduce the numbers of ‘meetings’ to one for the whole next six months. Demonstrations in the town centre continued after the declaration of the labour court. On the 30th of May delegations from Alsthom Kassel, Stuttgart and Berlin took part in the demonstrations, making a total of about 2,000 workers. In the leaflets the union IG Metal argues against job cuts, basing its arguments on local know-how, the quality, the profitability and the formerly signed job security contracts. The French CGT distributed similar leaflets at Areva (former Alsthom) in Le Petit Quevilly. On the 29th of June the demonstrations and short walk-out continued. [Solidarity website:]

The plant in Berlin mainly produces washing machines and other household devices. Officially this branch of Bosch/Siemens was able to increase revenue by 8.4 percent in 2004. Shortly after the announcement of these numbers, the management made public that the plant in Berlin will be shut by the end of 2006. About 700 workers will lose their jobs, with only 400 jobs in the research and development department remaining. The main arguement of the management is that most of the devices are sold abroad and that sales in Germany shrank by 3.6 percent. In 2004 the number of people employed by Bosch/Siemens Hausgeräte in Germany decreased by 500 to 14,000. Out of the 42 factories, only seven remain in Germany.
At the end of May 2005, about 2,000 workers from various factories in Berlin/Siemensstadt (Osram, DaimlerChrysler, BMW, CNH, Schleicher and Alstom Power) organised a demonstration in solidarity with the workers from Bosch/Siemens. As at Alsthom, there have been ‘info-meetings’ at Bosch/Siemens as well. The management promised to invest 90 million euros for a new washing machine model produced in the nearby plant in Nauen. Nauen was always the plant which the management used to put the Berlin staff under pressure. The staff in Berlin was known to be combative as a lot of Turkish left organisations are/were present within the factory, and there are more or less well-established links to staff in factories abroad. Nauen was opened after the re-unification, and thanks to high local unemployment, the management managed to enforce much lower standards and working conditions. 600 people lost their jobs in Nauen during 2004, as well, which somehow shed a different light on the management’s investment promises. In the summer-edition of ‘wildcat’ there is a longer analysis of the factories history and an interview with an active worker, which we will try to translate for the next prol-position news. [Solidarity contact: [email protected]]

Another washing-machine producing factory was supposed to be closed. On the 12th of July 750 workers of two shifts walk out and protest against the announced job cuts. At the same time the assembly-lines at the plant in Rothenburg were also laid idle. The closure in Nürnberg would effect 1750 workers plus thousands in the supplying industries. The Minister for Economy Clement traveled to the Electrolux headquarter in Sweden in order to ‘intervene for the jobs in Germany’.

During the last five years a rapid process of centralisation and internationalisation within the mobile phone sector took place. Productivity increased, valorisation shrank, few medium-size factories supply the global market with cell phones, often producing for different brands (see interview with ‘Solectron’ worker in ppnews #2, 5/2005). In Germany the Siemens mobile phone plant in Kamp-Lintfort became the symbol of the big break-through of the bosses in 2004, after the workers agreed on longer working hours and wage reduction in exchange for job security. How ‘secure’ the jobs actually are shows only a year later: in early June 2005 the Taiwanese company BenQ was given 350 million euros by Siemens for the take-over of the factory. BenQ won’t accept the negotiated job deal, the job guarantee for the 6,000 Siemens mobile-phone workers world-wide will run out in 2006. A short look at the recent development of this plant proves that ‘social-partnership’ and ‘wage abstention’ won’t secure jobs.
* 10th of April 2001: Siemens announces 2,000 job cuts in the mobile phone branch, production in Bocholt and Leipzig will cease and the mobile phone branch will be concentrated in Kamp-Lintfort. In 2000/2001 Siemens wanted to produce 50 Million phones, but sales are difficult.
* 10th of December 2002: Siemens announces 1,000 job cuts in Kamp-Lintfort, 320 permanent staff and 700 temps are supposed to go; Siemens threatens to re-re-locate some of the jobs back to Leipzig; in Kamp-Lintfort about 2,700 workers are employed; the Siemens management negates plans to sell the branch.
* 2nd of April 2004: Protests against management plans to re-locate production to Hungary; the management demands 30 percent wage reduction and return to the 40 hour week.
* 26th of June 2004: The union IG Metal proudly announces that it agreed on the demanded wage reductions and longer working hours and that in exchange the re-location to Hungary is postponed for at least two years.
* 7th of June 2005: Siemens sells the branch to BenQ and the negotiated job security for the remaining 2,000 workers remains valid till 2006.
After all this, the union and works council still have the guts to blame ‘management failure’ for the current situation, and they’ve already started moaning about BenQ ‘share-holder’ capitalism. A more combative response to management plans and against the official union strategy was given by Siemens workers in Milano/Italy.[1]

Kone in Hattingen produces escalators. The Finnish headquarters decided to shut the plant in Hattingen and to shift production to China and to Keighley in the UK. 325 jobs would be cut, a Kone plant in Italy might be affected, too. On the 17th of May 2005, the union organised a demonstration with about 500 workers and supporters in the local town centre. Nothing really surprising happened: there were some delegations from other factories, a unionist from Italy and Finnland, speeches from local politicians. It was interesting that the big boss of IG Metall made his way to this minor event, so did some bigger fish of the SPD, which was due to the still ongoing election campaign. At least the SPD guy didn’t get any applause. The most radical speech was performed by the local protestant priest. It was astonishing how often the word ‘capitalism’ was used, something that reflects the public debate. The whole event reveals its symbolic nature even more if we take into account that the work in the plant still continues. At the beginning of June some people of the Kone-Solidarity-Initiative called for a meeting of various effected companies in the ‘protest tent’ on the Kone premise. The union and works council drew-up an ‘alternative’- concept, which would result in 22 percent cost cuts and would only keep some of the more specialised production in Hattingen. The management refused the ‘alternative’. On the 14th of July it became public that the factory will actually be closed. The workers reacted with a spontaneous walk out, due to holiday and a high sick rate only half of the staff was actually at work anyway. [Solidarity Website:]

Grohe/Hemer, Lahr and Herzberg
Grohe produces bathroom fittings and employs about 5,800 people in Germany. In 2004 the US investors Texas Pacific Group and CSFB Private Equity took over the total shares. In early 2005 the management announced that in the course of cost reduction measures 1,500 to 3,000 jobs would be made redundant. There is already a production unit in Shanghai, but about 80 percent of the output is still produced in Germany (although only a fifth of the products are sold there). The plant in Herzberg/East Germany is supposed to close down completely, which would slash 300 jobs and increase the local unemployment rate from 23 to 30 percent. The staff organised two demos at the other factories in West Germany. A planned protest demonstration in Hemer was cancelled by the works council and IG Metall, which pissed off some of the more active workers. The main site of the company is in Hemer and the local works council and union want to secure the jobs for ‘their’ locations, at least that is the explaination by some. Some workers then went to the demo in Lahr, where 3,000 protested on the 21st of May 2005. On the 3rd of June a ‘Solidarity Initiative’ was founded by active unionists in Hemer. About 30 people came to the first meeting, which consisted mainly of debating the situation within the company. Another topic was the question of why the solidarity web-site was taken off the net. There were rumors that the management and works council put pressure on the internet provider claiming that there were ‘death threats’ on the site. The organisers of the web-site said that within three days the site became very popular, that about 580 people posted stuff and that someone might have called for ‘hanging the managers’. Another debate was if the staff would have to accept the economic condition of the company, given that even the works council proposed a ‘rescue package’ which would ‘only’ cut 1,000 jobs. Finally works council and management agreed on a plan to cut 1240 jobs within the next three years. On the 12th of June there was another demo with 2,000 people in Lahr. A report on indymedia describes the demonstration as ‘a collective election campaign of all political parties’, all trying to flatter the workers by refering to the quality of their products and by condemning the US turbo-capitalists. On the 25th of June the management announces 360 job cuts for the plant in Lahr. [Defunct Solidarity Web-Site: ]

Most of the Siemens plants are threatened by redundancies and/or relocations, being it the cell phone production in Kamp-Lintfort or the semi-conductor plant near Hamburg. In Würzburg, a car parts producing unit, the protests against announced cuts of 1,600 workers started in April 2005, with about 1,000 people organising some symbolic activities like encircling the factory with a human chain, etc. Siemens wants to shift production to Ostrava in the Czech Republic. In mid June 2005 the workers reps made a deal with the management: longer working hours and less money in exchange for a job guarantee for 1,400 workers till 2010. The relocation to Ostrava will still take place.

Danaher-Neff/Wolfschlugen, Waldenbuch
The US company Danaher announced that it will shut the plant in Waldenbuch at the end of 2005. The factory, which formerly belonged to Neff, produces automation and driving technology. The production was meant to be shifted to Brno in the Czech Republic. Danaher planned the same thing at the other location in Wolfschlugen, formerly Warner Electric, employing 100 workers, but, following the works council, the production unit in Brno ‘is not ready yet’. Nevertheless, the works council and union agreed to longer working hours (5 hours per week), wage reductions and job cuts in exchange for three years of guaranteed employment for the rest of the staff. This ‘success’ has as a consequence that the location in Waldenbuch will now definitely be shut and 100 jobs slashed. A solidarity party is planned for the 4th of June, but the call repeats the usual defensive moaning: we identify with the jobs and the company, etc. [Solidarity website:]

Denison Hydraulics/Hilden
In mid 2003, the US company Parker-Hannifin bought Denison Hydraulics for about 200 million euros. The economic situation of Denison was said to be stable. About 200 people were employed and were even awarded a bonus in 2004 for a successful year. In February 2005, the management announced the closure of the plant for 2006. They claimed the plant was unproductive and unprofitable. So far we have only heard of the usual petition and demonstrations against this closure (some workers visited the Kone demo in Hattingen, some local school students re-located their lessons to the factory, etc), but most of these actions are organised by active workers from the shop-floor rather than the regional union office. [Solidarity website:]

The car supplier in Stuttgart announced in May 2005 that it was to cut 600 jobs and demanded additional wage cuts of 15 percent. About 600 workers took part in some union-organised protests.

The car supplier wanted to relocate production, which would have threatened the 1,350 jobs in Germany. The unions reacted with some limited actions: in February 2005 the production in Geislingen stopped for several days. Audi, BMW, Daimler and Opel sent managers to the site, because the car plants started to lack rear lights, which Schefenacker produces. After negotiations the union succeeded in postponing this decision. In May 2005 the company had to admit that it bought an area within an industrial estate in Serbia and obtained a permission for building a factory there. In July the union announced that ‘the jobs are safe’ in exchange for cuts in holiday pay etc.

Early in June 2005, the photo-film producer Agfa in Leverkusen had to announce insolvency. Production had already stopped due to lack of material from the suppliers. About 870 jobs are at stake in Leverkusen, about 1,800 in the whole company. After a rapid financial aid package of 50 million euros, production was taken up again in order to fullfill outstanding orders.Solidarity website: []

Linde/Mainz, Cologne
The Linde branch for refrigerating technologies was sold to the US company UTC in 2004. A year after the take-over the management announced 1,300 job cuts, half of the total staff. A return to the 42 hours week without wage compensation plus cut of the holiday pay which was offered by the unions, but this wasn’t enough to convince UTC to stop its re-location to the Czech Republic and France.

After years of down-sizing, the glass manufacturer in Düsseldorf is finally closing, with the remaining 260 jobs being lost. The US company Owens, which took over the traditional glass manufacturer, announced the closure due to unprofitablity. Last demonstrations in June 2005.

[1] Strike at Siemens mobile phone plant in Milano/Italy: This strike is a quite unknown conflict, although it’s already been going on for about seven months now. The workers of the mobile phone plant Cassina dei Pecchi refuse to work from 9 p.m. to 2 a.m., fighting against the management’s plan to enforce an extension of night shifts. The factory employs 900 workers, 300 of them in mobile phone production, of which 120 would immediately be affected by the night shift schedule. The workers claim that night shifts are unhealthy and destroy social life. Although they don’t get strike money, they are keeping up the struggle, supported by other workers of the plant who are not affected and employees of other companies. In September 2004, 181 workers voted against the night shift schedule, 114 decided in favour. 305 of 361 workers took part in the ballot. At that time the big unions FIM, FIOM and UILM supported the management plan. The striking workers organised their own strike funds (Cassa di resistenza), something that the unions often talk about but haven’t accomplished yet. On April the 28th the management offers a ‘harmonisation’ of the working time in all Siemens plants in Italy, based on a 37.3 hours week, but still demands a flexibilisation of the shift system. [Solidarity-Phone-Line: 0039 / 3386083973]

[prol-position news #3, 8/2005]