Share this story
Close X
Switch to Desktop Site

Workers' role in sharing management decisions faces a fresh test over status of a key enterprise

West Germany's famous labor harmony is going to be put to yet another test on Nov. 21, when the Mannesmann management and IG-Metall trade union representatives resume their negotiations about "co-determination" after a three-month hiatus.

As was the case last time around, both sides are girding for confrontation and saying it's up to the other to preserve the consensus that has kept postwar Germany remarkably free of labor strife. As was not the case last August, there is now no national election campaign to magnify passions. istory would suggest that the two sides will find a suitable compromise before IG-Metall workers stage another token strike on the issue. But more militant younger union members are pressing the national union leadership to stand firm. And as both capital and labor seek to enchance their bargaining positions for the next encounter, neither will admit any likelihood of compromise. IG-Metall chairman Eugen Loderer made strict parity co-determination in Mannesmann a key point at the September congress of this 3 million-member trade union.

About these ads

At issue is the special West German institution of worker participation in management known as "Mitbestimmung," or "co-determination." It started with a 1951 law prescribing "Montanmitbestimmung," or co-determination in the basic (montan) mining industries of coal and steel. It was extended by Parliament in modified form to all companies with more than 2,000 employees in 1976.

The small but crucial difference between the two versions is what the current dispute is all about. In the coal and steel Montanmitbestimmung there is strict parity between management and labor on a company's supervisory board. In Mannesmann's case, this means 10 representatives of labor (4 from the Mannesmann steelworks employees, 6 from the union) to 10 representatives of management, with an additional neutral chairman accepted by both sides.

Under the general Mitbestimmung of 1976, by contrast, management has an edge in the compulsory supervisory board. One of the workers' representatives must be a white-collar employee, who is often not oriented toward the shop floor. And in case of a tie vote in the even-numbered board, the chairman -- who is from the management side -- gets the deciding vote.

Mannesmann, which started out as a steel producer, came and still comes under the strict parity provisions of Montanmitbestimmung. Gradually, as it diversified, steel and steel pipe production came to constitution only 40 percent of the Mannesmann AG holding the company's consolidated turnover.

Since the division of labor with Thyssen in 1969-70, Mannesmann's steelworks division no longer manufactures a comprehensive range of steel, but only that semifinished material that is to be turned into pipe by the tube mills division. The remaining four German divisions -- one additional division is entirely a Brazilian operation -- are metalworking and machine building, engineering, plant construction, and trading. Some 30,000 employees of Mannesmann's total 106,000 work in the tube mills, some 10,000 in the steelworks.

Given the financial squeeze in the highly competitive steel sector -- the steel tubes division lost 47 million deutsche marks last year -- Mannesmann president Egon Overbeck proposed a merger last summer that would sub-ordinate the steelworks to the tube mills division, eliminating 800 jobs (by attrition rather than firing), and saving the company a projected 50 million DM ($28 million US).

IG-Metall objected immediately, since the Mannesmann holding company would then be no longer be a steel producer by legal definition, would no longer fall under the strict parity of Montanmitbestimmung -- and would provide a precedent for West Germany's other diversified steel producers to slip out from under Montanmitbestimmung.

About these ads

The Mannesmann management then proposed a surprise compromise based on revising an abscure 1956 law. This law, governing holding companies in which steel and coal production constitutes a minimum 50 percent of turnover, provides for stronger worker representation than the 1976 general law but weaker representation that the 1951 Montanmitbestimmung.To apply to Mannesmann, this law would need two modifications: steep pipe would have to be

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.