The Multinational Monitor



Working in the EC:

Labor Responds to 1992

by Keith Harper

London - A little late in the day, the European trade union movement has begun to respond to plans to unite the 12 European Community (EC) countries into a single market in 1992. Facing corporations which are poised to manipulate the EC's new economic structures, European trade unions are beginning to cooperate and organize across national borders to confront the realities of 1992.

Thus far the main advocates for transnational trade union cooperation are the West German unions, which have the most to lose if the 1992 internal market leads to what they call "social dumping." The German unions are wary of companies' willingness to exploit the single market by switching from countries with relatively high social "costs" to low-wage and less socially protected countries, fearing that it could undermine trade union agreements on hours, wages and working conditions.

Pushed by the West Germans, the Brussels-based European Trade Union Confederation (ETUC) has begun planning a response. In March 1990, it brought together 1,000 trade union officials in Ostend in Belgium to discuss how employers are preparing for 1992 and how workers' interests can be advanced. The ETUC also held a March rally of more than 10,000 shop stewards near the European Commission's offices in Brussels, demanding that the single market not be constructed at the expense of the unions' hard won rights, freedoms and social standards.

The unions' response has been slow in coming, partly due to the erosion of trade union power in many Western European countries, where reduced membership has diminished labor's political clout. There are signs, notably in the successful campaign for a 35- hour working week in the West German engineering industry and ongoing efforts to shorten the work week in Britain, that this is changing. An upturn in some European economies and a spontaneous increase in shop floor militancy have both played a part.

It is through the ETUC that the unions are attempting to make their voice heard and put their actions into effect. Two European industry committees, one for chemical and energy workers and one for journalists, have been recognized by the ETUC this year, bringing the number of industry committees to 15. Most union leaders agree, however, that their work is just starting and that their national trade union confederations will be reluctant to allow them to negotiate pay and working conditions across national barriers.

Challenges to labor

Pay and conditions vary widely among European countries. The top runners are West Germany and Denmark; the UK, France, Italy and Ireland form a second tier; at the bottom of the earnings scale are less developed countries, including Spain and Portugal.

Corporations can use these disparities to force workers to compete against one another and thereby push wages downward.

However, "Trade unions look at these kind of figures differently," says Norman Willis, general secretary of the 8.3 million-strong British Trades Union Congress. "Particularly in the low wage countries, but also in countries like the UK, unions will tend to see moves toward a single European market as an opportunity to bring up real wages and conditions towards the level of the best."

He adds, "Unions in higher wage countries are concerned that their favorable terms and conditions are not undermined in competition with low wage countries. The common objective--and I hope it works-must be a period of adjustment so that pay levels can advance in all parts of the EC, most notably the less prosperous regions."

Raising wages throughout the EC will require that unions in branches of European multinationals coordinate their collective bargaining efforts. This has happened in some instances, such as at the computer company, Bull, and the food conglomerate, BSN- Gervaise Danone. On the basis of similar experiences, the European Metalworkers' Federation (EMF) has decided that all of its member unions should strive for European-wide contract negotiations with multinational employers.

Progress has been slow and employers have resisted approaches from unions representing their workforces in different countries. As a stopgap, the ETUC is pursuing the possibility of using EC funds to subsidize transnational trade union meetings when management will not agree to European-wide negotiations. These meetings have limited value, however, enabling unions to share information on productivity or the profitability of subsidiaries in other EC countries, but not much else.

Restructuring industry, restructuring unions

Trade union leaders also fear that 1992 will unleash more impersonal forces. They are concerned that the industrial restructuring which will accompany the unification of the European market will have dire consequences for their members.

All parties acknowledge that 1992 will generate economic restructuring. Some companies will shift production sites, some firms are expected to consolidate their operations, some businesses will close. Unification proponents claim the creation of new jobs will outweigh the social cost. An official EC forecast predicts 5 million new jobs (it does not indicate how many existing jobs might be lost), and a 4-7 percent increase in the living standards of the average citizen. This prediction, however, rests on optimistic assumptions about how companies will react and about government policies throughout the world.

Trade unions fear the effect of the restructuring on their members. John Edmonds, general secretary of the General Municipal Boilermakers' (GMB) general union, the second largest general union in the UK with 900,000 members, says, "In the short term, 500,000 European jobs might be lost as industries restructure. Firms will merge and production plants close as businesses adjust to more competitive trading conditions. There is no guarantee that they will be replaced by new jobs requiring similar skills or that new jobs will be concentrated in the same regions as jobs that are lost."

The European unions know they face tough battles if they are to protect the position of their stronger members, let alone create a framework which will encourage higher standards for workers in less advanced countries. The West German unions, notably the metal workers, have been among the first to see that the internationalization of production, where for instance one car is made by plants in several EC countries, demands a drastic overhaul of trade union organization.

They see the internationalization of production as heightening the need for joint trade union action across national borders. Unions operating within the same multinational company will have to synchronize their annual bargaining. The metal workers go one stage further, maintaining that single, transnational unions are a necessity. As yet, no takers have appeared for this proposal, but the metal workers remain excited about the prospects of European-wide, international unions, which they think will be able to exert significant pressure over corporations.

Opportunities for labor

Nineteen ninety-two does offer some positive openings for labor, though it remains unclear whether workers will be able to capitalize on them. One fruitful area for activity appears to be the shorter work week. Most European countries have 40 or 48 hour work week laws. But in most European countries, collective agreements improve on the legal situation.

In recent years, trade unions have notched a number of successes in reducing the work week for manual workers. The 38-hour week is the norm in Belgium and the Netherlands, and in Austria many industries have reduced weekly hours to 38.5. In Denmark, many industries are in the process of implementing a phased cut to 37 hours, and a similar campaign, backed by well-organized strikes in key plants, has been proceeding in the UK for the past year. Significantly, the single market issue has led to demands, primarily from the EMF unions, for harmonization of hours throughout Europe.

And the internationalization of production may enable a strong union in one country to improve conditions for workers in other countries who are employed by the same company. Jimmy Airlie, leader of the Ford engineering workers in the UK, is anxious to take advantage of this possibility. Ford of Britain is considering a reduction in the working hours for next year's wage deal. "If we look across national barriers, we can achieve it [at Ford] in Germany, Belgium and Spain, although it is asking a lot for trade union solidarity."

Some unions are already cooperating internationally on less crucial issues. For example, the 650,000 member Manufacturing, Science and Finance (MSF) general technical union in Britain is forming links with French unions within Rhone-Poulenc, the French state-owned chemical company, to get information about company policy it says it has been refused in Britain.

Peter Skyte, an MSF regional official, says the union has tried unsuccessfully to force Rhone-Poulenc to disclose its intentions following its takeover of RTZ Chemicals. MSF now wants to form permanent links with the CFDT and CGT French union confederations in Rhone-Poulenc. Skyte explains that the union wants to develop a European consultation structure with the company which would give British unions access to the same information as their French counterparts.

With his European counterparts, an official from the same union, Roger Lyons, has been able to set up European company councils (consisting of management and trade union representatives) with 12 multinational employers, including Nestle, Continental Can, Pechiney, and BSN. The MSF is pressuring Ford, Unilever and Philips to agree to similar deals. According to Lyons, company councils are not just "paper tigers." They will be involved in discussions about the shorter working week, new health and safety rights at the workplace and workers' councils.

Lyons says that "in order to cope with the increased power of the multinationals and with restructuring threatened in many sectors, we [the MSF] have worked closely with the other EC unions to build up solidarity. In the run-up to the single market, we work to undermine the anti-union stance of our own Government and to protect the interests of employees who may be affected."

An EC social charter

Lyons is focusing on British Prime Minister Margaret Thatcher, who, alone among EC heads of government, has opposed the adoption of the Commission's social action program. It covers a wide range of subjects from training and safety to the rights of working mothers and the freedom of movement across national boundaries.

The unions have had some influence in drawing up the program, but it still requires enforcement mechanisms which do not yet exist. Employers and industrialists, through their European Community-wide organization, UNICE, have not disguised their outright hostility. Their general secretary, Zygmunt Tyskiewicz, says that the "putative legislation" should not be allowed to grow to the point where it might impede the liberation of market forces.

A majority of EC governments have reluctantly come to the conclusion that without some gestures in the direction of improved social provisions, there is a real danger that organized labor might react against the entire 1992 project through strikes and other means, particularly when the economic and industrial casualties it may entail become obvious. Even UNICE accepts that improved training and other social provisions will expedite industrial re-structuring in the early 1990s.

In the UK, the GMB general union has distributed an action guide to its 30,000 shop stewards in one of the first attempts by a union to force companies to implement the terms of the social action program. The GMB's Edmonds says, "We are asking managers to carry out an audit of their existing agreements and conditions" to ensure they are in accord with the social action program.

He explains that the GMB will be linked to at least six European trade unions through cross frontier amalgamations and agreements in the next few years. Both private and public sector unions have been targeted and links have been set up at the national officer level. "Although our government has abdicated its responsibility on health and safety, taxation and industrial standards, we will not," Edmonds states.

The GMB claims to have made a breakthrough in industrial relations by winning a single union agreement with a West German company incorporating the EC's social program. The company, Keiper Recara, makes car seats and is setting up its first UK plant in Birmingham. Geoff Wheatley, a GMB local district official, says the agreement "provides the employment rights and conditions set down in the social charter which the GMB believes should apply to everybody at work."

Depite gains like the GMB's, substantial obstacles remain to the genuine implementation of the social pro-gram. The Ostend conference of shop stewards was concerned about the sincerity of European Community governments' claims of moving rapidly toward adopting a social charter of workers' rights. The stewards saw the logic of industrial unions linking up, however imperfectly, across national boundaries, mirroring the behavior of the corporations merging to take advantage of 1992.

They are suspicious of their own national centers, the TUC in London and the DGB in Dusseldorf, fearing they are nothing more than talking shops where hot air is the substitute for cool action. One of the stewards, Fritz Leider, a German official, summed up the feelings of many. "For too long, the fault of the trade union movement has been to go for global aims. I don't want to be the one who drew up the best set of aims that were still on the table in 1992."

This closely resembles the view from Brussels. The Commission will push for faster social legislation in some restricted fields, such as health and safety, but it is skeptical about the more ambitious ideas of "leveling up" social standards.

A perilous future

With business so well organized to pounce on the opportunities afforded by 1992 and government and EC bodies non-antagonistic at best, nothing will simply be given to labor. Social gains will probably come in small increments. But unless trade unions mobilize their members and coordinate their activities, a new wave of industrial restructuring is likely to so weaken organized labor in Europe that talk of a social Europe remains just that � talk.

Keith Harper is the labor correspondent for the (Manchester) Guardian.

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