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Germany: IG Metall pay settlement, workers' victory or bureaucratic showpiece?

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The results of the metal-workers' pay campaign in Germany have attracted a lot of attention not only at home but internationally. The workers' union, IG Metall, is widely recognised as the strongest trade-union in the industrial sector globally.

It is almost certainly the wealthiest and it is centrally involved in the actual running of major plants, particularly in the car industry, through Germany's system of institutionalised class collaboration, "Mitbestimmung", literally "co-determination" but best understood as co-management. It is also the largest industrial union in the world, if you leave aside the state-controlled Chinese unions.

It also has a militant reputation, largely as a result of the 7 week strike in 1984 which won the 35 hour week. However, that was also the last all-out strike, aimed at closing down industry across the country.

The car industry is based on a highly developed division of labour, which means that any serious strike would have a rapid impact, causing literally global dispruption. After 1984, Chancellor Helmut Kohl introduced laws against such strikes but, even where these were not applicable, the leaders of IG Metall backed away from any more all-out strikes. In fact, there have not been many strikes of any sort. Apart from disputes in individual plants, there was just one strike in Bavaria in the 90s and another in the militant and highly organised region of Baden-Württemberg in 2002.

It was in such regions that pressure for a serious strike campaign over wages and working hours has been building for some years. Two years ago, IG Metall decided to authorise one-day strikes, for which there would be strike pay, and which would not require a ballot of all members in a region, only those in selected plants that were called out. There would, however, also be no ballot to call strikes off.

Militancy has been fuelled by the current boom, which has seen the car industry breaking records, despite various scandals around emissions tests and price fixing. The union bureaucracy, sensing this pressure, demanded a 6 percent pay rise. In the engineering and electronics industry, collective agreements are negotiated at the regional level for all companies, but the campaign itself is nationwide. The union leaders calculated that the demands were well within the capacity of the employers and would not endanger either exports or high profits.

After a long struggle, the leadership also agreed to raise the issue of workers' right to reduce their working hours, for example, in case of family illness, and then return to their previous hours. What they would not do was raise the general question of cutting the standard hours from 35 to 32 nor even to demand a reduction in the standard week in the former East Germany from 38.5 hours, despite pressure from workers there for at least progress towards equalisation.

The one day strikes brought out half a million metal-workers and that was after several hundred thousands had already taken part in “warning strikes” before that. Clearly, there was no shortage of willingness to fight. At the same time, there are no reports of workers striking for longer, or taking unofficial" action at other plants not picked by the central bureaucracy. So, there were huge mobilisations, but all went according to the plans fixed in advance and no spontaneous moves were allowed. Then, much time was spent negotiating a contract with a result that is not easy to evaluate.

The eventual settlement is very complex; the headline figures look good, at first sight but, as ever, the devil is in the details, 73 pages of details!

The old contract expired in December 2017. For the first 3 months of 2018, all workers will get an increase of €100, then the basic rates will increase by 4.3 percent from April. This sounds good, but it is the only increase in those rates and the contract is to run for 27 months, until the end of March, 2020. That means the average annual increase is only about 2 percent.

In addition, however, there will be a completely new pay supplement, besides Holiday Pay and “Christmas Pay”, which are the equivalent of 1.2 monthly wages, after 3 years of seniority. The new supplement will be paid once a year in July. It consists of €400 plus 27.5 percent of a month's income. This €400 is the first pay rise in the metal and electrical industry, which is “flat-rate” for all levels of income. Up to now, such a demand has always been fought off fiercely by the bureaucracy when it was raised by the rank-and-file.

On the other hand, €400 per year is only a very modest part of the annual income, and it is conditional on "maintaining competitiveness", so could be the first thing to be sacrificed in a downturn. The gap between low and high incomes is widening all the time and this concession will not really stop that. Taking all the elements into account, the deal is worth about 7 percent over the 27 months.

Working hours
The settlement did include the right to individual "reduced full-time working hours". This means that the working time can be reduced for a limited period of time from 35 down to 28 hours, without workers losing their "full time" status. On the other hand, there is an “overload rate” of 10 percent, after which the companies can veto more people making use of this regulation. The significance of this concession is that, although there is a law to allow reduction of hours, it does not grant any right to return to the original hours. It was of course mostly women who got stuck in this “part-time-trap” with employers not raising their hours again after taking a reduction for child-care.

There is also an element of financial compensation for employees who take care of children, perform nursing/caring work or work particularly onerous shifts. These workers will be able to commute the July supplement into a total of 8 extra days leave per year. The rules governing who may make use of this are restrictive and complicated and, like the supplement itself, it does not apply until 2019.

The price paid by IG Metall is a wide range of options for increasing flexibility. These, in fact, compensate the employers for the reductions in individual working hours, for example, by allowing the 35 hour week to be increased to 40 when "necessary". All such concessions by the union have to be seen against the background that time flexibility in German industry is probably the highest in the world. Shift patterns that include Saturdays and Sundays, flexible working hours around the clock for white collar and skilled blue collar specialists, are the norm.

A closer examination of the result then, dispels the enthusiasm of its presentation by the bureaucracy and, indeed, many works councils and shop stewards. The increase in basic pay by around 7 percent in 27 months is not bad, but neither is it a great success. With inflation at 1.8 percent annually, it is clear that most of the gains from increased productivity will go to capital, not the workers. IG Metall should have demanded a collective reduction in hours with no loss of pay, to take that into account and also the threat to jobs from digitisation and "Industry 4.0" and the looming prospect of an end to the recent boom in car exports.

The struggle for the 35-hour week in the East, an alignment that failed several years ago due to the boycott of West German workers' representatives in the automotive industry, is also undermined by this agreement and the subsequent "peace obligation". The workers in Eastern Germany did succeed in forcing the demand for the 35 hour week onto the agenda, but all they have gained so far is further negotiations on the issue for the car industry in the East, without the right to strike. This makes clear that for the IG Metall leadership, the aim was to have the question of working hours put on the back burner for the next couple of years.

The bureaucracy strengthened
The bureaucracy spent a long time preparing this wage dispute, but they never involved the bulk of the membership, at best, only officials, works' councillors and senior stewards. Although rank and file pressure forced the issues of the working week in the East and for more jobs to deal with excessive workloads, neither achieved anything more than warm words declaring good intentions.

The result also reflects the fact that, despite the support for the initial "warning strikes", the IG Metall leadership refused to throw the full weight of the union into the balance by unlimited strikes. It is a result that does not cost employers too much, which seems to be a higher priority than protecting colleagues from increased workloads, job losses and precarious employment. The long term of 27 months also gives the bosses the advantage of long term stability.

The whole deal also played a role in the negotiations to establish a Grand Coalition government in Berlin. The bureaucracy, closely tied in with the leadership of the Social Democrats, SPD, has shown to the employers and the government that it can control the strongest battalions of the German working-class even when they are called out on strike. It underlined to them how decisive its control and power could be in future class-struggles. Of course, they expect this to be rewarded.

This makes it clear that any opposition against the reformist leadership cannot restrict itself to economic demands. It has to prepare for the next crisis, put the exploitation of the temporary-workers and the workers in the supply-chain, especially those in “low cost countries”, into the frame. Their super-exploitation contributes to the extra-profits that pay the union bureaucrats and bribe the leaders of the big works-councils and, indeed, broad layers of the labour-aristocracy in the metal industry.

The task for the left in Germany remains the building of an oppositional current within the unions that are not only class-collaborationist but main supporters of the German imperialist project of extracting extra-profits and gaining political domination in the world by exporting cars, machinery and chemicals.

On the wages and jobs front, this means fighting for control of all disputes by the workers from the outset; from the formulation of demands, to the campaigning, to planning strike action and right through to negotiations and a decision on a final agreement.
Frederik Haber