DaimlerChrysler Strike in Germany - Wildcat

Hartz V, Schrempp II1

»Up to now there have not been any common struggles that have developed against the ever widening gap of wages and conditions between the 'permanents' and the precarious outer edge. Have the 'Daimler workers' understood that the attacks related to everyone?« we wrote in Wildcat 68 in the introduction to »Precarisation«.

They have! The DaimlerChrysler factory workforce in Germany have reacted to the company directors' extortion with coordinated protests and strikes. The workers from the Mettingen factory near Stuttgart spectacularly occupied the important traffic artery, the B10, which connects the all industrial estates.

As soon as the workers showed their muscles directly, the works council boss quickly brought the matter to a close. He needed action, but not the kind that went beyond his control. Just enough to allow him to present an agreement as a success. He had 'secured' a lot of conditions that were apparently under threat: the five-minute breaks, the late-shift bonus, also the 35 hours week for the people in the car manufacturing, not however for their colleagues in the so-called 'service departments'; canteens, factory security, transport etc. In these sectors there was never even an agreement on job security for the current workforce. And a complete novelty in a German car factory, in the long run all the new employees will have lower wages and some will also have longer working time.

Daimler-Benz

The automobile companies have long been the last big bastions of the union movement. The works council, in co-management, has still managed to negotiate rising wages. Other workers also liked to point to the high wages as a 'bonus for social peace'. And a few unionists, interested only in their own company, have really sunk to new lows, as they stabbed their striking colleagues in East Germany in the back and first sabotaged, then stopped, their strike for reduction of work time. They did this because they thought that strikes in supplier companies would endanger the car production in 'their' companies.2 In the past the Daimler workers have often played an important role in the wage agreements: the union can rely on the fact that hundreds of workers from Sindelfingen will be on the picket line at the right moment, e.g. in 1996 in the struggle against the cuts of the continued payment of wages (e.g. in case of illness) to 80 percent of the previous wage by the CDU led government.

Even so, the works council leaders are not always that successful in keeping their sheep under control. Radical unionists are denounced as 'splitters' if they speak out publicly, and are even excluded from the unions.3 As a reaction to the inquiries of the state prosecution concerning the occupation of the B10 road, the IGM regional headquarters in Stuttgart threatened to withdraw any legal aid in a letter to the local union branch; "It is self-explanatory that union officials and members who act against the common agreement of the union are thereby placing themselves outside the framework of solidarity of joint action, and are also withdrawing themselves from the solidarity of the IGM in the case of any judicial processes that may be the consequence."

In a few factories there are (still) opposition or left union groups, some of whom publish a few newspapers and leaflets: In Bremen, Mannheim, Untertuerkheim and Mettingen. These are exactly the factories that faced the attacks and where the mobilisation was strongest.

In this concrete situation the Daimler workers had the possibility to fight together and so show their rage against both the attacks of the bosses and the governments social cuts.

The mechanism of class division that has been effective up to now seems to be breaking up: People on benefits are no longer seen as 'lazy' by the workers; People no longer complain that the Daimler workers are 'privileged'. Quite the opposite: people expected them to struggle, because they are in a position to do so.

The background

In June the IG Metall board signed an amended wage agreement with the company leaders of the mobile phone factory Siemens in Kamp-Lintfort and Bocholt. This agreement was basically an increase in work time to 40 hours a week without an equivalent wage increase and the cancellation of the Christmas bonus and holiday bonus. It was effectively about a 30 percent wage cut. There has never before been such a drastic worsening of the conditions of employment in a large company in West Germany. Unsurprisingly the financial press celebrated the breakthrough. You didn't have to wait long for the reaction of the metal companies. The union headquarters received demands by other metal companies (which the companies made sure were well publicised in the press) for the extension of the weekly working time.

The workers also immediately realised the impact of the hour. The IGM Branch meetings were overflowing, the majority calling on the Union Executive not to approve the new contract at Siemens. The conclusion at Siemens had shown everyone what could happen if you don't fight.

How was it possible to say to the Siemens workers: you have to work five hours longer and earn less than before?" A few possible arguments: 'Structurally weak region'; the only 'women's company' far and wide; the alternative would have been unemployment. No tradition of struggle, few union members.

And also, the wage reduction is not directly noticeable in the actual take-home pay: the regular monthly income does not drop, you just have to work one hour longer every day. And it is still a long time until Christmas. Or should we actually ask the question the other way around: Why was it so long before there was a general attack on permanent workers. In other European countries this happened a while ago. There were considerably more strikes against it in those countries, but the changes were pushed through despite this.

A wage decrease can best be enforced with a struggle

During the negotiation round in March 2004 the Daimler Chrysler Executive were already demanding an increase in work time to 40 hours per week. The head of the company works council, Klemm, offered the 40-hour week for the research and development department – and was called back by the workforce. The results of the negotiations: 2.7 percent more pay this year and 2 percent next.

In April the Chief Executive, Schrempp, was coming under considerable pressure due to huge losses by Mitsubishi, but the works council stuck by him. Both jointly sacked the designated boss of Mercedes Car Group, Dr Bernhard ("Ice-cold Restructurer").

In June a McKinsey-Study was published, that announced a 10 percent 'production reserve' at Mercedes: the union saw 10,000 of the 104,000 work places in danger.

Now the Mercedes boss, Hubbert threatened to not produce the new C class in the Sindelfingen factory, but to move it to Bremen or South Africa, because it is cheaper there. He set the works council under pressure with a cost cutting plan to the tune of 500 million Euros and demanded longer working times, wage cuts, the end of shift bonuses and paid breaks. The works council in Bremen and in Sindelfingen negotiated. In Sindelfingen 6000 well-paid jobs were now in question. An agreement was expected by the 25 June, but it didn 't come. Instead a large-scale conflict was staged at DC that was supposed to stand as a signal for the whole metal industry: enforced acceptance of cuts in a sector that is doing well.

Even before Hubbert had finalised his demands, a work stoppage had been co-ordinated: On Friday 9th July 9000 employees in Untertuekheim stopped work for half an hour in protest. This is where the production of the new diesel engines was up for debate. On Saturday no work was done at all in the Sindelfingen Factory, because the works council refused to agree that the maintenance workers should do a Saturday shift. 12,000 workers stayed home. The works councils in Bremen and Sindelfingen co-ordinated with each other and called all the 160,000 DC employees in Germany for a day of action on the 15 July. At ten different places there was some kind of heavy protest: In the night there was a torchlight procession in Düsseldorf by 600 DC employees. In Bremen 5000 protested, in Mannheim 8000, at the Woerth HGV factory 5000, in Landau 150, in Hamburg-Harburg, Berlin and Kassel each saw 1000 protestors. In Sindelfingen 20,000 colleagues went on strike.

It was only in Bremen and Stuttgart that the actions went beyond extended company-wide meetings or gatherings. In Mettingen 2000 workers occupied the four-lane B10 road and then walked the four kilometres to the central demonstration in Untertuerkheim (where 10,000 people took part).

On Saturday the 17th July 12,000 workers in Sindelfingen and 2500 in Untertuerkheim stayed home. Once again 1000 motorcars less. In many factories the determination to struggle remained unbroken up to the end.

The company works council boss, Klemm, had announced that there would be a second nation-wide day of action if there were not an agreement between the works council and the company. This did not ever take place. On Friday morning the final agreement was announced. One that was pronounced to be a 'model-contract ' for other sectors or companies. In Untertuerkheim the works council meeting was staged as a big show in the Hanns-Martin-Schleyer Hall. This time they wanted to have a common meeting of all three departments of the factory in order to keep things under control. The works council bosses bravely subjected themselves to prolonged heckling by the workers.

All just a set-up?

Schrempp succeeded in saving the demanded 500 million Euros – which no-one expected in the face of the mobilisation. DC manager Hubbert had been speaking about the 'Baden-Wuertembergish disease '4 in the press and so started a diversion tactic. He had aimed to provoke jealousy of the high-earning workers at Daimler. After this came the back-room dealings between Schrempp, Hubbert and the Works Council leadership. Was it just a pre-determined game to put pressure on the wages? Was the outsourcing really ever in debate?

The positive thing to keep hold of is that the Daimler Managers never did succeed in playing the factories off against each other. There were actions and/or work stoppages in all the factories, in Bremen even before the demands were formulated. Even the union in South Africa declared its solidarity; there were themselves on strike for better wages. The Daimler workers in Brazil had an action in front of the factory gates.

The 'Baden-Wuertembergish disease'

35-hour week?

The workers paid a high price for the gradual work time reduction to 35 hours per week in the 80s: with an end to real wage increases and ever more work time flexiblisation – in the direction of an extension of the working week when there is more work to do and without overtime pay (that had previously added up to about 25 percent) and Saturdays work being increasingly taken for granted as being part of regular work time.

At Daimler Chrysler the company time was also massively extended within the framework of such regulations: in Hamburg 17 shifts were worked per week, for the last eight years there has been a 'temporary ' weekend shift (Friday to Sunday). In the bus factory in Mannheim there are 18 shifts including Saturday.

In the meantime, whatever is stated in the written contract no longer determines the concrete work-time in the company. In practice it is often from the results of supplementary contracts, location security contracts or simply company agreements. Now workers can spread their work time account over years (i.e. take time off in lieu years after the extra shift worked). This makes the short-term extension or reduction of the weekly work-time possible, without the boss having to shoulder additional costs in the form of overtime bonuses.

In all Daimler factories regularly the working day is eight hours; the reduction in work time is worked out using free shifts. I.e. additional to the holidays there are about another 30 days off – and a corresponding large reserve of staff.

'The five-minute breaks'

The so-called 'Steinkuehler' break is the five-minute break per hour for piece workers, which came out of the three-week workers' struggle in 1973. Firstly it was negotiated in the Nordwuerttemburg / Nordbaden regional agreement by the then regional head of the union, (who later became the IGM boss) and then it was secured in the wage agreement round II. Not to be confused with the three minute 'personal time allowance ', that everyone has, for the way to the toilet or the cigarette… The break times have been ever more eroded in the last few years: i.e. downtime due to the machinery breaking down, team talks or training time is counted up and reduced from these paid breaks. In many companies one can work through the breaks in lieu of time off another time – which makes defunct the whole sense of the breaks, as a short reprise from the endless stress.

Extreme increase in performance and efficiency

The introduction of so-called teamwork and efficiency increase has gone hand in hand over the last few years. Assembly lines are once again the norm of production today; the rhythm is often set at under one minute. Taylorism, plus the responsibility shifted onto the workers.

A political and economic attack

Shortly after the conclusion of the 500 Million Euro savings the second quarter report of Daimler Chrysler Group was published: 1.5 Billion Euro profit increase.

Up to the middle of the 1990s Daimler Benz was the exception as a car company, in that its production basis was almost exclusively localized in Germany (assembly taking place in Bremen and the Stuttgart region including Sindelfingen and Untertuerkheim) and it did not co-operate with other car firms. 1995 was an about-turn. The Chief Executive, Juergen Schrempp, who had already instigated the building of a factory in South Africa, wanted Daimler-Benz to become a global player. Which meant being present in the European, American and Asian markets. With the accomplishment of a production branch in Alabama and the 1998 takeover ('merger ') of Chrysler, DC became listed on the international stock exchange, with 430,000 employees and the fifth largest car producer in the world. After high losses, they resold their shares in Mitsubishi, which were originally bought in order to secure the Asian market. The operational profits in the previous year were 5.68 Billion Euros. About 60 percent of this was from the 'Mercedes Car Group ', namely 3.1 Billion Euro, but now their sales became stagnant: in May there was a worldwide sales collapse of 9.2 percent, in the first eight months of the year around 4.7 percent. There was a drop in sales of the Mercedes Cars alone by 9 percent in August. In financial circles Daimler was seen to be revenue-weak since the takeover of Chrysler, which led to the stocks falling by half their value within one year.

For years one can see that Daimler plays individual factories off against each other, like the HGV axel factory in Gaggenau and Kassel a few years ago or now Bremen and Stuttgart. When it comes to deciding where a new part should be produced company departments are set up in competitions to outsourced firms.

So far this competition with other companies plays a more important role than the company's internal competition with the new locations in USA and Asia.

For national state regulations there is no room for manoeuvre under these conditions, neither on the level of the social state or the company level. The radical phrases of the works council reps at the protest rallies serve as a cover for the approval of every new wage reduction and cuts in work places, with the explanation that one can 't do anything else. In order to seriously, effectively, go against the attack from the company bosses and their systematic blackmail, the workers at Daimler-Chrysler, Siemens and all the other companies have to totally break from the old national state orientated union concept and understand themselves as a part of the international class.

Crisis of the car industry and Kondratieff?5

The car industry is the only industry in the last ten years to expand their workforce in the BRD (Germany). As a pulling sector of capitalism it has had something of a revival in the last ten years, after all the hope placed on a computer – or even an Internet – cycle was broken. It seemed to be the branch of industry that forms the pillar of the fourth cycle of Kondratieff with very robust modernising capabilities. The car industry today belongs to the research and development intensive branch of industry, i.e. the product is technically ever more demanding, the cycle therefore ever more extended. The added value per car constantly increases. Despite intensive rationalisation the relation between the employed workforce and the number of cars produced remains more or less constant.

So what about the profit?

As ever more cars can be produced in an ever-shorter time, the sales are stagnating worldwide. One car is assembled in 20 hours today, and then it sits for about 20 to 40 days in a stockpile before it finds a buyer. The high sales figures can only remain at their level through massive price reductions: many businesses pay out extra for each car sold, e.g. each car sold by Chrysler in the USA in 2003 cost them 496 dollars. At the moment China promises even higher rates of growth, but 'market saturation ' is foreseeable. For example the large share of the market of VW is a costly exercise for them, with losses on every car sold – nevertheless the share of the market is shrinking. Today only about a quarter of the profits of the car firms come from the car sales, the rest comes from sales of accessories and parts, customers services and financial business through the banks exclusive to the company – e.g. the Daimler-Chrysler Bank. Ford and GM boost their loss-leading car sales, and are thus able to pay the interest to their creditors with the payment instalments from those who buy on credit. This is a high-risk survival strategy, which will bury billions of dollars in losses if it carries on much longer.

The results

Workers security
The works council notched up the security of the work force as the great success of the agreement and thereby justified all the 'concessions '. The 'exclusion of operational dismissals ' is restricted until December 2011, and is linked to certain pre-set conditions being met. If they company goes below this, then there will be new negotiations. The only secured 'success ' is the commitment to investment that guarantees the production of the C-class in Sindelfingen. Had anyone really doubted that?

Three tier pay scales
They have given up on the basic 'equal pay for equal work'; all new employees will now get less pay in the long run; a starting salary for the first 24 months (20 percent lower), then in 2007 a lower basic pay of 8 percent less than those currently employed, and all bonuses are calculated on the this lower basis. In the long run this makes a ten percent wage difference.

Service department wages
For those currently employed in the so-called service departments (canteen, factory security –who does or does not belong to this category is decided at company level!) the weekly working time will be gradually raised to 39 hours per week. All new employees have to start on a 39-hour week straight away and only get the basic IGM pay and conditions without shift bonuses and overtime bonuses only after 130 extra hours, and so will clearly be getting less money for the same work as their colleagues. The split pay scales, which have been known mostly from the USA up to now, are now fixed at Daimler-Chrysler.

Extension of working time
The 20,000 workers in the research and development department can voluntarily start working 40 hours a week straight away, but then they do get the equivalent wage increase.

Redefining of additional payments above the wage
The IGM has always defended the position that the piecework wages are completely integrated in the collective wage agreement. Now the IGM acknowledges that there are parts of this wage which lie outside the agreement and can be discounted from future collective wage increases. At the same time the works council this won 't happen before 2011, expect if the 'operating profit ' of the German car production halves, or goes into the red.

Collective wage agreement
The collective wage agreement is supposed to standardize different wage levels of all workers, manual and admin and bonus payments and group the whole workforce using the same criteria. The basis was: no-one should earn less than they do now. Now there are permanently two wage levels: for those currently employed and for the new employees. The aim of the new groupings was, amongst other things, a wage increase for the skilled workers. The implementation now makes it completely clear that the workers with more physical stress (assembly workers, metal press workers, foundry workers etc) are the losers, because in the future these criterions will play a less important role in the grouping. Important are now criteria such as 'qualification ', 'communication ' and 'level of responsibility '. It is well known that these are relatively unimportant for the assembly worker, even if the defenders of team-work always maintain the opposite. This all means that the newly employed assembly workers will earn a few hundred Euros less per month.

DC Move
DC Move is the name for the scheme to pay all the trainees, temp workers and new employees out of a central account. This means that if there is a surplus of workers in one factory, they can be moved elsewhere. This potential flexibility of the use of their workforce also squeezes out the remaining 'unproductive times '(i.e. the breathing space for the workers) of the department, where the department boss can now calculate more rigidly with how many workers he needs.

Temp workers
In future there will be temps working at Daimler-Chrysler, paid at the lowest IGM rate.

Interview with two unionists from a factory in Untertuerkheim

"For us, the force of the mobilization overshadows the results"

A: The atmosphere was more confrontational than in the 1996 conflict over the question of the re-location of production. At that time a phase of short-time had just begun, that caught the 'pampered ' Daimler workers on the back foot. They still had a phase of fear hanging over them. At that time we lefties were also placed under pressure. The workmates wanted to push us towards concessions. We said: "so retract us, we are not going to do that". And then we simply grasped the right moment at a particular time when the company had overstretched itself in its intoxication of victory. Then we said: "OK guys, if we were in your shoes: go home!" That is what they did … Then on the Friday late shift we were in front of the gates with megaphones, so the people simply did not go in any more.

In Mettingen we brought the factory to a stand still with work stoppages for five shifts in a row, while the guys in Untertuerkheim were still thinking about it. It was only by the time of the last of these shifts that the workers in Untertuerkheim joined in. This partly because the works council headquarters were based in Untertuerkheim. And also the way in which they work: they were supposed to start at a signal and stop at a signal.

B: This time the people were angry that in a firm that is making billions of Euros profit, there was suddenly supposed to be a saving squeezed out of the workforce. The people simply had no patience left for this kind of thing. There was a really strong anger, and there still is. It has not gone away.

A: I would go so far as to call it hate, what I can notice in people sometimes.

B: We've sure had some experiences! For example someone wrote on a metal sheet he had produced, "blackmail", "hate" etc. Even thought it would be clear later who had written it. The parts were probably painted over. Some said that we now we have to really kick the chairmen off their chairs. And not make any compromises at all.

A: It simply came from the fact that people were already fed up, before the conflict really started. Firstly, there was this phase of extreme work intensification that took place before. Secondly the Agenda 20106 , which everyone hated. And then the media were giving you the feeling that that as a worker you were the last arsehole, the scapegoat of the nation, that you are a drain on the companies and the state: 'demanding, uncompromising ', 'world holiday champion ', and all that shit, that they shove your head full of. That is why the people were getting really pissed off, and that was the point that they then said, "This is enough!".

B: Lots of people still don't really realized exactly what the concrete results were. And the way it was sold by the IG Metal bosses and the Works Council bosses: because people came out and said, "we didn't have to give up anything". Because the main points were either not presented at all, or presented in a better light.

A: So far the workers have not been saying, "Shit results. That is not what we were struggling for. Everything is shit! Betrayal!" Even though lots of people refused the agreement, it is still the form of the confrontation, this growing unity and the mobilization, the force, which the confrontation developed, which remains as a positive experience in peoples' heads. The people are not demoralised. In a way the story is very contradictory. This is still present for the people, as an unbelievably positive experience, that in a way goes beyond the dimensions and the significance of the story, subjectively. And that is a good thing.

B: In the past it was really often that a good mobilization of the workers, that was then settled with some cloak and dagger result, ended with the people then saying: "That was a load of bollocks. We needn't have bothered doing anything just to get that kind of result. It's always the bloody same". But this time that is not the case. We are making T-shirts with a picture of the B10 action. Not one worker who we offered the T-shirts to has said, "That didn 't help us at all" or "piss off with your T-shirts, it was all a load of bollocks". Not at all. And it won't just go away. I'm convinced of that. That is the positive aspect that came out of this situation. That the people think "If they would just let us, just give us the freedom, to really put our strength into such a mobilization, then we could really achieve something".

So what about the actual work conditions now?

A: 15 years ago it was totally normal to be finished with the required amount of work by half past eight. And not at eleven o 'clock. Now people work right up to the end, or go maybe ten minutes before the end of work time, but we simply don't have what we used to have. There is this crazy pressure to work really hard. Before the management were only around in the early shift, and there were not really many of them there during the late shift, now they are they over all the shifts. They just look to check that everyone is working hard right up to the last minute. And now they have they these big information boards up in the factory, to try to give us a guilty conscious for always being just a bit behind the production targets. This has increased so much that one can say that we are back to a situation of basic factory assembly line work.

How many piecework breaks do you still have?

B: In our workplace we lost some of these five minute breaks (Steinkuehlerpause) in 1996. The breaks were now counted in the so-called "relaxation through task changing". What this meant was that within the teamwork the people undertook various different activities and didn't just work on the assembly line or at one machine, Taylorism style, but had a variety tasks within the factory. If you look at the reality of this, this variety of tasks is not really so great. It concentrates around whichever foreman is in the group and the normal worker does the same shit work as before, perhaps sometimes repairing the machines or other problem solving, but this doesn 't mean less stress.

How many fixed breaks do you still have? For piece workers?

A: On the assembly line there is now 30 minutes paid break left from the original 40. And then there is the unpaid break, the meal break of 30 minutes. Six months ago, after the company was going back to classic taylorist assembly lines, with highly repetitive jobs and without the "relaxation through task changing", the works council (after pressure from the rank and file) took up the struggle and extended the breaks again.

Are they still collective breaks?

B: In the assembly department they are mostly still collective. But there are a lot of departments (e.g. the mechanical production) departments , where these breaks are not collective anymore. The pressure in this direction increases. But that is a point that is really important to the people, that they can take their breaks together with their workmates. That is where they resist.

You say that Daimler is doing well, that the attacks where not 'economically' necessary?

A: They wanted to raise the return on investment. If you talk to middle management they say that the return on investment is about 7 percent in average. But they want to increase it to 12 to 15 percent!

So it was a political attack?

A: Well, I think it was both that the Daimler Management is one of the spearheads in the employer association and so are supposed to make sure that they steer it in the other direction, not just raising wages, but also working in the other direction. I think that was the aim. That they used Hubbert to do this is yet another story. He had just had his contract renewed and they had fired Bernhard, all done with the workers representatives sitting on the company board, which also extended Schrempp 's contract. It all smells of a set-up and one that was being prepared for some time.

• 1Hartz is the name of the architect of the Benefit System reforms taking place in Germany, and Hartz IV is the name for this year's round of reforms. At the same time he is Personal Manager of Volkswagen and intenting to impose reforms at the Volkswagen plants as well (this is what we called Hartz V). Schrempp is the Chief Executive of DaimlerChrysler.
• 2 The head of the company works council, Klemm, was amongst those who desperately pleaded for the end to the IGM strike for the 35 hours week in June 2003 in East Germany. The Untertuerkheim works council boss, Lense, had also often spoken out against the strike and fought as a candidate against the strike leader, Peters.
• 3The embarrassing details of how former communists are today themselves kicking communists out of committees and expelling them from the unions all together are documented on www.labournet.de The attitude towards independent election candidates is the same as it was in the 1970s.
• 4The embarrassing details of how former communists are today themselves kicking communists out of committees and expelling them from the unions all together are documented on www.labournet.de The attitude towards independent election candidates is the same as it was in the 1970s.
• 5Kondratieff is crisis theoretician who discovered the long waves of crisis, longer than the normal conjuncture.
• 6Agenda 2010 is a restructuring of the most parts of the social states, e.g. semi-privatisation of the pension systems, reorganisation of the health and health insurance system and the Hartz reforms of unemployment benefit. Overall they tend to place more risk on the individual worker, rather than the employer or the state.