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Germany: Strike Failure Puts Pressure On Top Labor Union

For decades, the German metal-workers union IG Metall has dominated labor relations, playing a major role in higher pay and shorter hours for workers. Its successes have led the way to similar benefits for Germany's other trade unions. But last month, a strike organized by IG Metall to win shorter working hours in former communist eastern Germany flopped when thousands of workers failed to support it. Now, some are wondering if the powerful role of labor unions in Germany is nearing an end.

Munich, 10 July 2003 (RFE/RL) -- IG Metall's failure to organize a successful strike in former communist eastern Germany came as a shock.

In theory, the strike should have won enthusiastic support. IG Metall wanted to reduce the working week for East Germans from 38 hours to 35 hours -- the same as in western Germany. At present, the East Germans get the same basic pay as those in the west, despite working the extra three hours. Employers say the system helps attract badly needed investment.

Initially, more than 300,000 workers in Saxony and Berlin joined the strike, but it collapsed after four weeks (on 28 June) when the automobile manufacturers BMW and Volkswagen shut down their assembly lines because of a lack of parts. Thousands of workers, fearing they could lose their jobs, returned to work.

It was the first major defeat for the powerful IG Metall since 1954 and has inspired economists and others to examine whether it remains a powerful player in an economically weak Germany.

Labor unions have traditionally enjoyed a strong position in Germany. Relations between industry and the unions were generally good and strikes were rare. Union representatives sit on the boards of many German companies.

IG Metall has played a leading role in this system. Its strength lies in its 2.7 million members, most of whom are employed in car factories and other industries important for the German export market.

Critics claim that IG Metall's leadership has distanced itself from its members, however, and has ignored economic realities. Nationwide unemployment hovers around 4.4 million -- or about 10.6 percent of the work force.

Critics say IG Metall's leadership made a serious mistake in calling a strike in eastern Germany. Since the strike collapsed, hundreds of workers have resigned from the labor union, arguing that it is out of touch.

Opinion polls taken during the strike showed that as many as 70 percent of Germans believed it was harming the eastern German economy. Many workers also told reporters they were angry at public fights between the labor union's retiring president, Klaus Zwickel, who is considered a moderate, and his deputy and possible successor, Jurgen Peters.

Peters wants the union to follow an aggressive course despite the economic situation. In contrast, Zwickel has come to believe that a militant approach is unlikely to be successful at a time of high unemployment and economic weakness.

Many commentators believe the failure of the eastern German strike has weakened the bargaining strength of the labor unions. But Interior Minister Otto Schily told reporters he has no doubt that IG Metall and other labor unions will remain an important factor in Germany. He also made clear his belief that IG Metall needs new leadership.

"The country needs strong labor unions. That's why it would be good if IG Metall could agree soon on a new leadership. I think it is clear that those who are determined to carry on this dispute are not suitable for the leadership," Schily said.

One of those who believes the failure of the east German strike could weaken the strong role of labor unions is Klaus Zimmermann, the president of the German Institute for Economic Research in Berlin. He said this week that collective bargaining will certainly continue, but he thinks the labor unions will start from a weaker position in the future.

Germany has been close to recession since the end of the economic boom of the late 1990s, and most economists believe recovery will be slow. Figures released this week seem to bear this out. The output of consumer goods has fallen by 2 percent this year and new car production is down 19 percent. Most economists are skeptical of government forecasts that the economy will grow by 0.75 percent this year and about 2 percent next year.

Discussions over the future power of labor unions comes at a time when the government, led by Chancellor Gerhard Schroeder, is taking action in an effort to revitalize the economy. Schroeder has proposed introducing tax cuts next year instead of in 2005 to encourage spending and boost the economy. He has also won support for social and labor reforms, including cuts in unemployment benefits and a relaxation of job-protection laws.