- Hold second, and possibly a third, forum.
•
-21-Phase III: January-Oecember 1983
- Complete and disseminate all books, reports and monographs, in-cluding a report on the forum del iberations and a non-technical book summarizing the. project's overall findings and conclusions.
-·Hold final forum •
Appendix II
Wolfgang Streeck +
+Research Fellow, International Institute of,Management, Berlin
Presentation given at the First Policy Forum of the "Future of the Automobile" Research Project, Philadelphia, June 29 to July 1, 1981
I . Factcrs weakening t.i.e bargaining power of organized labor in the automobile industries of old industrialized countries.
(1) increasing international competition (2) increasing mobility of capital
(3) increasing use of labor-saving automated equipment II. Resulting problems for auto worker unians in old industrial
countries:
(1) declining number of jobs
(2) lower wage increases, Stagnation or decline of real wages, erosion of differentials to other workers in other countries (3) intensification of werk
III. Possible responses by unians representing auto workers in old industrialized countries:
( 1) "international strategy"
(2) "national protection cartel"
(3) "productivity coalition"
IV. Strategie alternative facing auto industry employers in old industrialized countries:
(1) Is a cooperative, "neo-corporatist" approach to labor rela-tions in a period of industrial chang~ necessary, or
(2) Is an antagonistic, "neo-liberal" solution possible?
In other words, is "social partnership", "industrial democracy",
"social compact", "co-determination", etc.:
(1) A solution to the labor relations problems of industrial change, or is it
(2) Part of the problem?
industry during the coming years. While the discussion focuses on the Situation in Western Europe, much of i t applies to the old in-dustrialized countries generally. Turning to the position of organ-ized labor first, i t is obvious that i t has grown·more difficult in recent years and is likely to become even more so in the immediate future. Basically, there are three main developments that are ne-gatively affecting the bargaining power of trade unians in the auto-mobile industry of developed Western countries:
(1) increasing international competition, especially from Japan and perhaps from Third World countries, but also between the United States and Western Europe;
(2) increasing mobility of capital as a result of new, more easily transferable production technologies;
(3) increasing use of automated labor saving production techno-logy at home and abroad.
Resulting from this, trade unians are increasingly confronted -in some countries more than -in others, but generally throughout the developed industrial world - by three basic calamities:
(1) a possible and indeed probable decline in the number of jobs available in the industry irr Europe as a whole and in the United States, including the possibility of large-scale redundancies and forced dismissals;
(2) lower wage increases, perhaps even a decline of real wages, and lasses in terms of auto workers' position in their respective national wage structures;
(3) intensification of work for those workers who are permitted to remain in the industry, new and more stringent forms of quality control, increased needs for re-training, increasing demands for mobility of workers, etc.
I would like briefly to discuss the three main strategic options European, and in principle also American, automobile workers unians
seem to have in this situation. While the three strategies I will describe are not necessarily mutually exclusive, they represent ideal types which seem to be useful as a starting point for our discussion.
The first possible response of automobile unions·· to the process of global industrial change is what I would call the international
stra-~- Basically,. it· involves an extension of the principle of trade unionism - the suspension of competition among workers - to the world market. I think that strategies of this kind will, on the whole, be unsuccessful. The main reason is fundamental differences of interest between auto workers in different countries, given that the nurober of
jobs in the industry world-wide is not only not growing but may, in fact, decline. Moreover, workers in the Third World and in Japan have no
reason to sacrifks econom~ opportunities in order to help European and American workers protect their far superior standard of living. There are, in addition, cultural differences and the absence of streng inter-national union federations which could make binding decisions on behalf of their affiliates. In sum, while the industry is becoming more
inter-nationally integrated and coordinated, this is not likely oto ·be the· case with labor. Here, differences of interest resulting from different
geograph-ical location are not easily overcome, and an increasingly mobile capi-tal can take advantage of this condition.
The secend option I call a protection cartel. While this
stra-·tegy may take on a wide range on specific forms, its basic underlying the
motif is resistance of/labor movement to industrial change and re-structuring. For such resistance to be successful in a medium and longer term, organized labor has to enlist the state, and perhaps capital as wel~, to protect the existing industrial structure from external competition. Protection can be made available under a number of labels, e.g. labor market policy, job creation, industrial policy, etc~, and it can be effected through trade barriers, direct subsidization, nationalization and other means. Unlike the first, international option, there are empirical examples for this strategy the most well-known is Great Britain in general and British Leyland in particular. I believe that in the years ahead, i t would be ex-ceedingly difficult for European auto workers to pursue a protection-ist strategy of this kind. Partly, this is due to internal reasons.
A union lL~e the German IG Metall represents not only auto workers, but also workers from other industries which depend ·on free world trade. More generally, a protection cartel requires favorable ex-ternal circumstances that are at present not existing. Among the factors making a protectionist strategy of resistance against change unlikely to succeed are:
- the fiscal crisis of the state which may make i t simply impos-sible financially to support an inefficient automobile industry;
- the effective withdrawal of what has come to be called in the past the "political full employment guarantee";
- the crisls of Social Democracy, closely associated with the demise of neo-Keynesian, demand-oriented economic policies in the face of high inflation, and ~~e shift towards supply-side economic policies.
The third possible option I call a productivity coalition. It involves an undertaking by trade unians to cooperate in industrial
restruct~ing and modernization in return for institutionalized in-fluence on the process. Arrangements of this kind have been traded under labels like "social partnership", "industrial democracy",
"co-d-etermination","social compact", etc. Normal~y, tobe stable they require some external facilitation by the state and may in this sense
(temporarily) contain some protectionist elements. In the jargon of political science, such tripartite alliances have been termed "neo-corporatist" systems of economic management and government. In the context of a stagnating or declining industry, a neo-cerparatist
solution involves unians and business in a given country (and perhaps, company) joining forces. to increase their share in the shrinking calce of jobs and profits, respectively. Note the consequences this has for international solidarity between workers and, presumably, for international trade union organization. In the productivity coali-tion scenario, unians rather than abolishing competicoali-tion at the world market become parties to it. 1Very generally speaking, a productivity coalition in the context of the automobile industry would mean that unians would have to ensure the acceptance of structural change by
their members while management would have to cede some of its prerogatives to the unions. Management also would have to accept, during the transi-tion period, economically sub-optimal solutransi-tions, in particular in terms of manpower policy. In exchange, it would be guaranteed relative tran-quility and absence of disruptions of production.
I believe there are indications that the third option is what unians in Europe and the United States would prefer to choose at the present time. In Europe, this holds not only for the Swedish and German unians but also for those in Italy (cf. the EUR declaration of. 1980). Gene-rally, i t seems that trade unians are prepared to sacrifice a signific-ant proportion of the jobs in the auto industry i~ order to save the others; to go along with technical rationalization and higher product-i vproduct-i ty provproduct-ided the process can be slowed down to al.low for gradual adaptation, and part of the costs are borne by the community at large;
to be content with lower wage increases if they get a say in how the industry is managed and governed etc.
However, although joining · in anational productivity coalition is difficult enough for trade unians having to represent the interests
of their membeiS, it is not at all clear whether unians will be affered an opportunity to do so. The British example seems to show that state and employers may lose interest in a cooperative solution to industrial crisis and may instead pref.er to let the market da the job. It may be that the bargaining power of organized labor in the automobile industry of developed industrialized countries has been eroded to such an extent that capital does no langer depend upon union cooperation, and that it feels no need to offer unions a productivity coalition cn acceptable terms. Ta distinquish this scenario from the "neo-corporatist" arrange-ment described above·, one might speak of a "neo-liberal" response to
industrial change - in more popular terms: a "roll-back" of trade
unionism, the welfare state, Social Democracy or whatever, with capital governing the process of industrial modernization an its own terms.
My suspicion is that there is a streng temptation presently on the part of managements and employers in the auto industry of developed
countries to take advantage of the situation and to go out for an antagonistic, conflic~al solution. In some countries, including the United States, this may in fact be what will happen. In others, the same event is rather more unlikely e.g. Germany·or Sweden. Political factors play an important role. For example, before the change of Government in France, a solution against the unians would have been conceivable; now i t no langer is. In any case, the reluctance of employers to pay a price for trade union cooperation may add to the problems trade unians have with their members when taking part in cooperative solutions to problems of industrial change. Cooperative trade union policies require an appropriate organizational
sub-structure, ~~d trade union movements in some countries may just not have such a structure. Moreover, cooperation can also have'a de-stabilizing effect on trade union organization. It is only where favorable institutional and political conditions meet with streng, centralized, unified trade union organization that employers will be prevented from choosing the neo-liberal and rejecting the neo-corpora-tist option.
Assuming that countries, and national automobile industries in particular, are likely to differ in terms of trade union influence on the process of industrial restructuring, the question arises whe-ther cooperative systems of labor relations will be able to compete successfully with neo-liberal systems. External competition by
systems with weak influence of organized labor may pese a significant threat to the stability of neo-cerparatist solutions. On the other
hand, while it is frequently assumed that differences in the institu-tional structure of labor relations can create. competitive advantages and disadvantages for national industries, there are_sharply con-trasting views on the direction of this effect. For some, "social partnership", "industrial democracy", "co-determination" etc. tend
to impair economic efficiency and undermine a nat~onal economy's competitiveness. For .others, the exclusion of labor from industrial government appears so costly in terms of motivation and social/indus-trial peace that cooperation,although it also has its costs, is on balance more economical. Auto manufacturers and their associations in developed industrial countries will in the near future have to make up their mind whether they regard neo-cerparatist cooperation as a solution to the labor relations problems of industrial change, or whether they define it as part of the problem.
Let me conclude these necessarily brief remarks by emphasizing the importance of the future o.f automobile industrial relations for other social institutions. Developments in the automobile industry have frequently set the pattern for a country's industrial relations
system as a whole. In addition, at least as far as Europe is con-cerned, the automobile industry is among the first major industries confronted by the challenge of de-industrialization. Events in this industry will be indicative of whether our societies will be able to
.
cope peacefully with the fundamental problems of structural change in the world economy, and whether the "historical compromise" between labor and capital upon which liberal democracy depends can be pre-served in a period of crisis and transition.
UM · Platz der Luftbrücke 1-3 · D-1000 Bertin 42 · Phone (0 30) 69 04-1
Recent Develooments in Automobile Industrial Relations
Announcement of an international workshop to be held in Berlin will focus specifically on three problems:
(1) With increasing international competitionl how will different national industrial relations systemsrespond to growing pressures for economic and techno-logical change? In particular 1 to what extent andin what way da ~nstitutional auto-producing countries? In particular, are such relations likely to beccme more conflictual as a result of intensified rationalization 1 low growth1 increa~
sing mobility of capital etc., or will they to the contrary become more peaceful, with the State assuming responsibility for organizing and safeguarding
"respon-sible" cooperation between the "social partners"? Will the power and the poli-tical role of organized labor decline, or will ~~e need for an orderly management of Stagnation and de-industrialization make it necessary to oqer trade unians more effective opportunities for participation at the company or the national
industrial policy level? Will neo-cerparatist structures of sectoral and na-tional "class collaboration" lose their previous functions and disintegrate, or are they likely to be strengthened and extended in response to industrial crisis?
(3) Finally, what consequences will the global pressures for industrial change have an industrial relations on an international ~evel? With increasing interdependencies between the outcomes of joint regulation in different coun-triesl i t may become necessary to conceive of national industrial relations systems as of elements of a more encompassing transnational system including national as well as international unians and business associations, national + Detailed information on the program can be obtained from the international
Berliner Ccmme!Zbank .AG. Kto.-Nr. 507 9140 OC (Sl.Z 100 400 00) Postai checK: 8er11n West 2658 34-108 (Sl.Z 100 100101
and multinational firms, and national states as well as supranational governmental agencies. Transnational industrial relations systems can, in principle, be struc~
tured araund three major lines of differentiation: (1) the classical division
be~1een capital and organized labour (international employers and trade union confederations) , (2) the divisions between multinational companies bargaining with company-based, multi-national committees of labor representatives, and (3) the divisions between national economies. All three lines of differentiation are present in any transnational industrial relations system, but systems may differ in their relative strength and in the way in which they relate to each other. While a transnational industrial relations system can be expected to be less densely integrated and less formally institutionalized than a national one, it is much more complex, and it may develop a dynamic of its own which may signif-icantly affect the functioning of its national component systems ("world politics of industrial relations").+
As a first step in the organization and international coordination of the
"Future of the Automobile" industrial relations suh-project, the Wissenschafts-zentrum Berlin is convening a workshop devoted to a survey of "Recent Develop-ments . .in Automobile Industrial Relationsir in major auto producing countries.
Participants should be individuals or groups who have done empirical work on industrial relations, preferably in the auto industry, and who are willing to cooperate with the project in the future.++ Countries represented at the work-shop should include France, Great Britain, Italy, Japan, Sweden and the United States in addition to West Germany. For each ·country, one paper should be pre-sented describing the major: trends and tendencies in industrial relations in the automobile industry from the early seventies to the present. The papers should contain information on the following points:
(1) the development of employment, production, productivity, profitability, relative wage levels and other basic economic characteristics of the industry during the seventies;
(2) the structure of trade unians and employers associations and its changes in the seventies, in particular with regard to the density and composi-tion of union membership, the number of unians and employers associacomposi-tions, their jurisdictions, their internal structure, their relations to each other, their integration into national union and employers peak associations and their links to international organizations;
(3) the development since the early seventies of the institutions of col-lective bargaining and industrial democracy, in particular the number of "bargain-ing units" in the industry, their relationship to each other and to more encom-passing bargaining arenas, the relative importance of workplace, company and industry-wide collective bargaining, the extent of wage drift, the role of state agencies, the presence and extent of rights to co-determination and industrial democracy, etc.;
Cooperating· teams or individuals might take responsibility for conducting the country. study for the project in their respective countries. Other, looser forms of cooperation are also conceivable. Although there already exist work-ing contacts in some countries, especially in the framewerk of the "Future of the Automobile" country teams, further collaboration would be welcorne.
The workshop should provide an opportunity to establish contacts and disc~ss
different possibilities of cooperation.
{4) the major issues that have confronted unions and employers since the early seventies, for example overcapacity, redundancies, lass of· export markets,
"job expert" through investment in foreign countries, increasing competition by foreign producers on the domestic market, introduc~on.of new product and pro-duction technology, the conflict between protectionism and free trade, etc.;
(5} the major outcomes of collective bargaining and "joint regulation"
since the early seventies, in particular with respect to issues like employment protection, job regulation and job control, "humanization of working life", mobility of labour, etc.
Individuals er groups who would like to participate in the workshop and possibly contribute a paper along the suggested lines are asked to contact the organizers as soon as possible. Readers of this circular who know possible participants in the workshop are requested to bring the project to their atten-tion er relate their names and addresses to the organizers; they will then immediately be contacted.
The workshop. is scheduled to take place on February S-6, .1982. Papers should be submitted to the organizers by no later than January 8. The number of participants will not exceed twenty. Participants who present a paper will be paid their travel expenses and a daily allowance covering the costs of hotel
The workshop. is scheduled to take place on February S-6, .1982. Papers should be submitted to the organizers by no later than January 8. The number of participants will not exceed twenty. Participants who present a paper will be paid their travel expenses and a daily allowance covering the costs of hotel