September 23, 2020

the case of car maker Daimler


Companies abound in which, in the face of the crisis generated by the COVID-19 pandemic, they have not spared in making layoffs to reduce costs and thus adjust to the shock what the coronavirus has meant. This is not the case, at the moment, of the German car manufacturer Daimler. In this German company, responsible for brands such as Mercedes-Benz or Smart, the social dialogue is maintaining what its workers at the company’s headquarters call “job security”. Moreover, at Daimler, a firm that has not announced layoffs associated with the coronavirus crisis, employees and management have just had a year in which there will be no forced exits from the company.

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“The latest negotiations between the works council and the management were aimed at maintaining job security,” he tells elDiario.es a spokesperson for the works council. This body is dominated by the IG Metall trade union, the largest trade union organization in the German industrial sector.

IG Metall representatives at Daimler have achieved a resounding measure in Germany aimed precisely at securing employment. The idea is to reduce the working hours of workers. Thus, for employees in the company’s offices – not for those on the assembly lines – the 35 hours of work per week will become 33 hours as of next October. This reduction will last until October 2021. In the meantime, there will be no layoffs.

“One point of the agreements is the reduction of 5.7% in working time for the management teams of Daimler AG, Mercedes-Benz AG and Daimler Truck AG in Germany. It is about two hours a week less work without compensation and for a limited period of one year “, explains the spokesperson for the works council. “The dimension of the reduction in working hours is a good compromise and does not cause economic problems for workers. Jobs are safe,” he adds.

At Daimler, temporary measures of this kind were already taken in the worst days of the financial crisis of 2008 and 2009. Daimler emerged from that crisis with flying colors. This shows that from 2009 to 2019 the company has not stopped seeing its business volume grow. According to the German statistics portal Statista, in 2019 Daimler had a turnover of 175,750 million euros. Ten years earlier, the figure was almost € 79 billion.

“In the last crisis of 2008 and 2009 we already took measures like this. The situation was similar. Demand fell, also sales. And a fall in demand leads to excess capacity. That is why we have to act”, says the spokesperson for the works council.

Ferdinand Dudenhöffer, professor at the University of Duisburg-Essen (West German) and head of the Center for Automobile Research (CAR), sees potential in the latest measures to preserve employment at Daimler.

“Some similar measures were already taken by Volkswagen about twenty years ago, reducing up to 28 hours of work per week,” Dudenhöffer tells elDiario.es. “Volkswagen then had great excess capacities and that is why, for a couple of years, they took such a measure, something that made it possible to adjust to the situation.”

The package of measures agreed by management and unions to avoid layoffs at Daimler has meant that workers also accept the loss of bonuses. Workers will not collect supplements or compensation for those who, at Daimler, do not take the eight days off they have if they have to take care of their children or a dependent person at home.

“The workers will have to take the eight days, instead of working them and receive compensation,” said the spokesman for the works council. These sacrifices are accompanied by words that almost sound like a warning from union representatives to management.

Horrible year “for the auto industry

“We have to see how the measures will help in the challenge of making Daimler ready for the future”, but “now it is up to the managers of the company to think about how to improve business structures and processes to be more efficient”, raises the head of the works council.

The temporary cuts affect just over 70,000 employees. Without the bonuses, 130,000 employees remain. Thanks to these efforts, Daimler can be maintained, for the moment, without redundancies. But for this company, as for many in the automotive sector – one of the pillars of the German economy – 2020 is being “a horrible year”, according to the newspaper’s terms. Handelsblatt.

Daimler has recorded losses of 1.7 billion euros in the first half of the year. 2020 is expected to end with benefits, albeit limited. For union representatives, the key to ending the year better than it started is to respect security measures in the pandemic.

“It is enough to keep your distance and, when you cannot, wear a mask, in addition to hand hygiene. We have to continue to respect hygiene measures to avoid another big wave of COVID-19 infections, especially now that our business it is going back again, “says the works council spokesman.

In Germany there was no harsh confinement as in Spain, Italy or France, but the automotive sector was practically idle for weeks, with employees receiving the short-time subsidy so that they did not go to their jobs.

That is why the unions have also put the accent since they had the opportunity to take care of job security in the face of COVID-19. At Daimler they manufacture, for example, their own employees’ masks. “Only when people are in safe work situations can they give their best,” says the committee spokesman. In times of pandemic, taking care of job security is also applying social distance measures.

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