Rehabilitation pact renewed at Deutz

On 6 May 1997, the German machinery and tractor maker Deutz AG publicised information on the employees' contribution to a rescue package agreed in 1996, and a package deal on Improvement of results, growth and employment which was recently signed by Deutz and its group works council.

Presenting its 1996 results on 6 May 1997, Deutz AG, the German machinery and tractor maker which almost collapsed last year, also publicised information on the employees' contribution to its 1996 rescue package. The group is undergoing a radical restructuring after a crisis last year, caused by big losses on cement plants in Saudi Arabia. The deal was struck in May/June 1996 between management and the group works council and included the following:

• wage cuts of between 2.75% and 10% for all employees;
• all promises regarding occupational pension schemes were rescinded;
• 160 unpaid extra working hours per employee, for all employees covered by collective agreements; and
• measures to increase working time flexibility for all employees covered by collective agreements.

The agreement is valid for 1996 and 1997, and is supposed to save the company an estimated DEM 110 million.

Recently, management and the group works council signed a package deal on Improvement of results, growth and employment which is valid for the years 1998 to 2000. It includes:

• the renewal of the employees' contribution to the rescue package;
• Deutz AG will in return avoid redundancies, create additional jobs in research and development, and invest in the Deutz establishments in Cologne; and
• an employee stock ownership plan for all employees to improve employee motivation.

After a net loss of DEM 1.13 billion in 1995, and a net profit of DEM 847 million in 1996, management, the group works council and the 9,000 employees at Deutz hope that the rehabilitation measures will prove successful.