Prol-Position on casualisation and agency working at a large German electronics manufacturer.
Alongside Solectron [see prol-position news no. 2/2005] and Celestica, Flextronics is the biggest 'non-brand manufacturer' for electronic goods. Flextronics is a contract manufacturer among others for Sony, Ericsson, Microsoft and Siemens, producing and labeling their play-stations, mobile phones or TV-satellite receivers. In the US about 70 per cent of all electronic goods are already produced by 'sub-contractors' like Flextronics; in Europe it is about 20 per cent. In China a single sub-contractor factory produces half of the world markets' demand and three quarters of the European demand for microwaves, just to give a picture about dimensions and productivity of this sector. And these companies play an important role in the re-structuring process of multinational manufacturers, e.g. in 2000 Siemens contracted Flextronics to produce 33 million mobile phones. Shortly after this Siemens sold the rest of the mobile phone branch to BenQ.
BenQ liquidated the remaining factories soon after the take-over [see prol-position news no. 3/2005 'On German anti-capitalism']. Like most of the companies of the sector in 2001 Flextronics was hit by a severe slump, worldwide 10,000 of the 80,000 employees were dismissed. The high competitiveness of the contract manufacturer is not only based on low wages, but on economy of scale, a high rate of machinery utilization and a worldwide network which is able to order the cheapest components at a given point in time and which coordinates the company internal division of labour on a global scale. A particularly close cooperation exists between the plant in Guadalajara, Mexico and Sarva, Hungary. These plants are identical in their outlay and organisation and they both produce a play station for Microsoft. In Hungary they adjust the production to seasonal up and downs of the market: during the summer some departments produce single-use cameras for Kodak and in autumn they manufacture parts for DVD-recorders for Philips and Panasonic.
The backbone of this kind of flexible production is a new generation of machines that put the electronic components on the circuit-board. They can be set-up for different series of circuit-boards in shorter time. At this point we still have to be careful and distinguish between official ideology of 'production on demand' and the reality on the shop floor. The management of the plant in Paderborn state that only 8 eight per cent of all manufactured models (of identical circuit boards) are produced in series of 1,000 or more and that the average series comprise only about 200 pieces (i.e. claiming that it is not mass production). According to official company statements the plant is able to fit 165,000 components per hour, on seven different production lines, for 15 different clients and in total 500 different products. On the line people say that the number of 500 different models is extremely exaggerated. The plant in Paderborn, a small town in the west of Germany, belongs to the SBS-branch of Flextronics (Special business Solution, meaning that the focus is on middle-sized contracts). The clients are, amongst others, Macro System, PWB Technologies, TRW Automotive, Aastra, Wincor Nixdorf, Blaupunkt, Conrad, Fujitsu Siemens, Hella, Bintec Funkwerk, ADVA – optical Network, SUN Microsystems, Siemens, Data Display, KBA and SINN. Flextronics took over the plant from the computer-server manufacturer Fujitsu Siemens. In the 90s Fujitsu-Siemens itself was outsourced from the bigger computer plant of Siemens-Nixdorf, the main employer in Paderborn at this time. The 630 workers who were employed at Fujitsu-Siemens got new contracts with Flextronics. Apart from the server manufacturing Flextronics started to get other contracts. Once a new contract is obtained the achievement is presented to the employees in a general assembly, in English and with colourful screenings. The individual location is portrayed to be in fierce competition with the other global locations, but the example of the computer manufacturer SUN shows, that the competition is 'artificial company policy' of Flextronics. SUN wanted the computer parts to be produced in the plant in Hungary, but out of company strategy reasons Flextronics agreed on paying the wage difference themselves, in order to be able to produce them in the plant in Paderborn. [http://www.flextronics.com/Contacts/GlobalLocations/paderborn.asp]
The Composition of the (Temp-) Workers
In addition to the 600 permanents, Flextronics employs about 60 temp workers from two smaller local temp-agencies (PPS and Heuer und Koenig). Workers from the big agency Randstad are only hired for the neighbouring plant of Wincor Nixdorf. According to the companies' collective contract only 45 temp workers are supposed to be employed, but the actual numbers are higher. In the production unit half of the permanent workers are migrants, some came from Turkey other from Poland during the 80s or from the former Soviet Union during the 90s. Half of the total workforce are women. In the huge logistics department the composition might be different. Some of the permanents took part in a kind of unpaid apprenticeship that the job centre organised at Nixdorf, the former mother company. Some of them got a proper contract afterwards. Nixdorf still used to train apprentices; some of them now work as mechanics or electricians in the production unit. Most of the permanents have worked in the plant for the last 10, 15, 20 years, but no one has been made permanent for the last five years. The company puts big announcements on the notice board promising leaving pay for any permanent workers who quit the job voluntarily, disregarding the current boom and the lack of experienced workforce. A lot of the temp workers are from migrant background, too, a lot of them are so-called 'Aussiedler', people who were born in the former Soviet Union but have German ancestors. Particularly at weekends there are also a lot of student temp workers employed. Some of the temps have worked at Flextronics before, only for a period of a few months each year, for the last three or four years. All in all the permanents are much more relaxed, they ask the temps to take a coffee break every now and then.
There are seven production lines, two of them dedicated to 'mass-production' for the bigger contracts, mainly audio-circuit boards for Blaupunkt. Until last year Blaupunkt manufactured these boards in France, but then stopped the production. Flextronics bought the machines and started producing the same circuit boards as a contractor for Blaupunkt. The work at the Blaupunkt lines is very standardised and they have a high output. At the smaller lines the output is less, e.g. after 400 circuit boards the machines have to be re-set for a different model. These lines produce about 30 to 150 circuit boards per hour, depending on the model. Apart from filling the machines with electronic components the main task is the setting and re-adjustment of the machines. There are only few women doing this job, most of them work in the department where circuit boards and components are soldered by hand and in the quality department. According to the management you need one month of training at these smaller lines, but actually it is more like two or three months, given the complexity of these machines. At the mass-producing lines the training period is only one week. If these lines are under full steam, the work is quite stressful. Blaupunkt intervened in the production process: at the mass-lines only permanent workers are supposed to do the quality check. Those temp workers who did the job already for half a year had to be given a different job. The control and so-called quality check was intensified. Hourly all workers on the lines are supposed to fill in the number of produced pieces and their efficiency into a spreadsheet and a graph. At the computer at the line you can check these figures. It might say:
Production Line Hanover
Target: 40 circuit boards
Actual boards produced: 30
Efficiency: 75 per cent
Everyone has to fill in their figures into the chart at their machine. Most people do this, but only reluctantly and in a rather sloppy way. Everyone knows that this measure is only meant to give people a bad conscience, given that the figures are in the computer anyway and that the bosses could just check them their. If your efficiency rate is under 80 per cent you are also supposed to give reasons. But this measure is not yet completely enforced; a lot of people just forget to fill in the chart. The already mentioned company internal network, which Flextronics uses in order to integrate the various production locations, is to a certain degree also used by the production workers. You might use this intranet, e.g. if you search for a particular stencil which is used for marking the board with soldering paste. You type in a product code and then you can see the location of the stencil in the storage department. You can also see for which company a certain model is produced, how many are ordered and what the price of the product is.
Whether the production of small series is profitable for an industrial company like Flextronics, depends on the time spent on resetting the machines and on changing the work organisation. From my own experience and after talking to other workers the average time to restart the production of a model which has already been produced in the plant previously - not a prototype - takes about a week: from resetting the machines, re-organising the storage department etc. to full production capacity. The management says that the time necessary to re-set machines from one model too the other is supposed to take twelve minutes. This is under the condition that the machines and storage is already adjusted to these models, that is not a complete start from scratch. In fact the time needed is more like two hours. Sometimes there are problems with lack of components, e.g. last week we produced telephones, but there were parts missing. I only produced 750 instead of 1,000. We will have to make up for it once the components are delivered. Sometimes lines are shut down completely for a period of time.
Wage and Working Time
The permanent workers' wages start from 12.50 Euros per hour before tax for 'unskilled' production workers. The temp workers get between 7.50 Euros for 'unskilled' and 10.50 Euros for 'skilled' workers, though 'skilled' only means that they have a contract with the temp agency as a qualified worker, not that their actual work in the plant differs in required skills. After Flextronics took over the plant, and after a new collective contract has been agreed on, a so-called Haustarifvertrag [in-house wage and conditions contract], which is limited to the company instead of the whole sector, the permanent workers had to put up with a monthly wage loss of about 200 to 300 Euros. In addition to that there is fear amongst the staff that the new ERA wage assessment model, which was agreed on by the union and which will be implemented in the whole metal sector, will lead to further wage cuts. ERA triggers anger in a lot of companies (see report on Nokia). Despite this fact, or maybe because of it, only few production workers took part in demonstrations during the last collective contract campaign of the metal union IG Metall. There are three rotating shifts which one week start on Sunday at 10pm, the next week on Monday 10pm, meaning that you work early shift one week, late-shift the following week and night-shift the week after.
For one cycle the night-shift starts on Sunday, the next cycle on Monday. In that way each worker on a Monday cycle has to work three weeks in a row on Saturdays. This model also allows for extending the working week to six days if necessary. The consequence of this model is that on Mondays and Saturdays there are only half of the staff working. The company uses student temp workers to fill the gap. During a five days week we work 37 and a half hours, the temp workers get 25 per cent extra for night-shifts, it might be more for the permanents.
A lot of temp workers leave the company after a short stay and there are arguments concerning the low wages. The students asked why there is a three Euros wage difference between 'skilled' and 'unskilled' temp workers although they do the same work. The students in the quality department got a 50 cents per hour 'quality-bonus', the other workers of the same temp agency did not. In contrast to that a lot of workers at the mass-lines, mainly students, are fired more quickly. You cannot follow it up, people just disappear, only days later you notice or hear that another three students have been kicked out. A lot of people quit because of stress, there is a very tight technological control, e.g. no product must leave your machine unregistered and there are very heavy production targets. Often there are no foremen around for hours, then they appear and ask you: "What is wrong with your efficiency?!". Workers have to sign all sorts of shit, without knowing why. If you manage to stay longer than half a year you are the king of seniority amongst the temps.
[prol-position news #8 | 4/2007] www.prol-position.net