Industry's Upper Hand at the Negotiating Table

When DaimlerChrysler on Tuesday told workers they would move 6,000 jobs from their main plant in southern Germany elsewhere to save €500 million ($617 million), state union leader Jörg Hofmann saw red.

The threats came just a few weeks after Siemens forced the country's powerful IG Metall union into getting plant workers to work longer for no compensation. Siemens had threatened to move 2,000 jobs to Hungary had IG Metall not agreed to the 40-hour work week.

"What is happening right now is dramatic," Hofmann, who heads IG Metall in Baden-Württemberg told the Tagesspiegel newspaper. "Siemens encouraged them to attack us."

"Us" refers to around 6,000 workers at DaimlerChrysler's main production facilities in Sindelfingen who could lose their jobs should unions and management fail to reach agreement on cost-cutting measures.

Not working long enough

Daimler management wants concessions from the unions on cutting payment bonuses workers currently earn for working afternoon and late shifts. Workers at Daimler's plants in Baden-Württemberg work, on average, 30.1 hours a week, far too little for Daimler management at a time when some German companies are beginning to re-introduce the 40-hour work week.

As a result, Daimler has threatened to move production of the C-class car (photo) normally built in Sindelfingen to either Bremen, where cars cost €500 less to produce, or South Africa. Industry association heads have already warned workers not to block cost-cutting efforts.

"Many jobs that could be saved, would be lost forever," said Dieter Hundt, the head of Germany's largest employer's organization, BDA.

"Gun to the chest"

The head of Mercedes Car Group, Jürgen Hubbert, has been meeting with Hofmann and chairman of the Corporate Works Council Erich Klemm to find a solution.

Meanwhile, union leaders have ratcheted up the rhetoric in what they consider a dangerous trend.

The deputy head of the worker's union Ver.di, Margret Mönig-Raane, told German television that Daimler's methods amounted to a "gun pointed at the chest -- either you bend to satisfy our conditions or we move."

Mercedes workers across Germany plan to take part in strikes on Thursday.

Soothing nerves

Chancellor Gerhard Schröder has so far struck a neutral tone. Already on bad terms with his traditional voter strongholds, the unions, Schröder said on Tuesday that "working hours should be looked at flexibly from branch to branch."

Bernd Gottschalk, head of the powerful German Automotive Industry Association (VDA), tried to soothe frazzled nerves on both sides. Gottschalk said his association is against the idea that production can just as easily be moved abroad, as Siemens and Daimler have threatened, calling the notion "absurd."

He also said the discussion on restructuring labor costs was not about introducing "Chinese or Romanian wages in Germany." Cutting bonus payments, on the other hand, should not be considered taboo by unions.