A strike is just what Daimler-Benz's new chairman didn't need
Stuttgart, West Germany
It wasn't the best of times to meet the chairman of Daimler-Benz. The interview with Dr. Werner Breitschwerdt, head of one of the world's most prestigious and profitable automobile companies, had been planned for 10 in the morning. But after an industry-union meeting the day before had collapsed in total disarray, a last-minute conference of the company's board of management had been called - and at noontime it was still going on.
The reason: the strike by West Germany's powerful metalworkers' union, which has plunged the engine plant here at suburban Unterturkheim into silence.
''They might as well ask for a zero-hour week as 35,'' snapped Dr. Breitschwerdt when the meeting finally broke up at 1:45. The union, IG Metall, is demanding a 35-hour workweek (compared with 40 at present) with no loss in pay - in part to cut the country's unemployment, which is now figured at 9 percent.
From his 13th-floor office windows, commanding a view of the hillside vineyards of the Neckar Valley, the man generally addressed as ''the professor'' disagrees with the union's view. He recounts the severe loss to West German industry because of the metalworkers' strike - and his conviction that a cut in the workweek without loss of pay would damage the economy and increase, rather than reduce, unemployment.
In his first interview with a journalist since he took office last December, the man who says he could sell every car he can build - if only he could build them - is now deeply concerned with the inroads of Japanese cars in the country. ''Even today our working time is 25 percent less than in Japan,'' he says. ''You can imagine what the effect of a settlement in this strike will be. Also, our hourly wage rates are higher than in Japan, plus the extras that everybody gets.
''So all of this makes us 30 percent more expensive than the Japanese.''
The strike itself has also been expensive. It has forced the layoff of thousands of workers in Daimler-Benz plants in such areas as nearby Sindelfingen and in Bremen, in northern Germany. Each day it continues, the Mercedes builder alone is losing nearly 2,300 cars and 600 trucks - and $45 million to $50 million in sales revenue a day. The cost to BMW in Munich is some $20 million a day, while Volkswagenwerk AG has laid off more than 100,000 in Wolfsburg and other plants around the country.
At 2.5 million members, IG Metall is the biggest labor union in West Germany - with an estimated treasure chest of $350 million to $450 million. Lockouts by employers - aimed at exhausting union funds with aid payments to those workers affected - have so far been confined to the areas directly affected by strikes.
Breitschwerdt, who had headed the company's research-and-development operation till he took over the chairmanship after the death of his predecessor, Dr. Gerhard Prinz, now pleads for a compromise, which appears to be shaping up. The employers had earlier offered to reduce the workweek to 38 hours in two stages for some workers, ''but still keeping in mind the utilization of capacity ,'' as Breitschwerdt puts it.
''The strike is a great blow to the West Germany economy and is serious for all the companies, but especially for those companies such as Daimler-Benz which were fully utilizing all their capacity,'' Breitschwerdt asserts. The carmaker's US dealers are losing one car a day, or 1,800 a week.
The chairman is particularly concerned about the potential impact of the strike on the price of its cars. ''If we went to 35 hours, that would make us 20 percent more expensive,'' he asserts. ''As a result, we might sell fewer cars and lose not only one car per dealer but maybe 10. . . . It is hard to get back market share after you've lost it,'' he laments.
The Japanese, now holding about 10 percent of the West German auto market, doubled their car shipments as the metalworker strike approached. Whether the Japanese carmakers will now achieve a stronger grip on the free-trade West German market is unclear.
Before the strike, ironically, the West German automakers had adopted the Japanese system of just-in-time delivery of vehicle parts - thus leaving them vulnerable to a sudden cutoff of components when IG Metall struck the supplier plants. Without parts, the assembly lines stopped.
Beyond the strike, Breitschwerdt has other concerns. The chairman is also concerned about moves in the United States to introduce protective legislation, which could potentially affect future sales of his cars. He worries, too, about commercial vehicle sales.
''We are very much concerned about the balance of payments in many developing and threshold countries of the world,'' he says. ''They need the vehicles,'' he explains, ''but there is no purchasing power to buy them.''
It's still far too early to see any substantive shift in the direction of Daimler-Benz with the new driver at the corporate wheel. One of the givens about the upper-crust automaker is its relative insulation from significant change. Asked what the overall direction of the company is today, the chairman simply replies: ''To maintain the image of the company.''
While Dr. Breitschwerdt had earlier guided the developmental thrust of the company, his predecessor, Dr. Prinz, was oriented more toward the economic side of the ledger - while his predecessor, Dr. Joachim Zahn, had a legal background.
Defending the cost of a Mercedes in the US market, Breitschwerdt insists that ''they're inexpensive for what they offer.'' Even so, a Mercedes in the United States costs about twice as much as a comparable vehicle sold in West Germany - partly because all imports have to meet the safety and emissions requirements of US law.
Not everyone, of course, thinks the German products are worth the cost. Carroll Shelby, the former US auto racer and car-performance buff who now runs a car-development center for Chrysler Corporation on the West Coast, charges that ''Daimler-Benz and BMW are doing a good job of selling white blackbirds in the United States.''
''I would put it differently,'' Breitschwerdt says.
Before the strike and lockout, Daimler-Benz had hoped to build and sell 520, 000 cars this year. That probably will not happen now. It sold 73,000 cars in the US last year and had aimed at 80,000 in 1984.