Employment alliance signed at Mercedes Benz

On 27 February 1997, a company-wide "employment alliance" was signed at Mercedes Benz, aimed at boosting competitiveness and maintaining jobs in the group's German operations.

On 27 February 1997, a company-wide employment alliance (Beschäftigungspakt) was signed at the automobile manufacturer Mercedes Benz. A whole package of instruments should boost competitiveness and save the jobs of the 134,000 employees working for Mercedes Benz in Germany. The background to the agreement is the increasing international competition between different potential production locations, and the resulting need to cut costs.

The first cornerstone of the package involves local establishment works agreement s (Betriebsvereinbarungen) on investment, product lines, working time flexibility, sickness absence and the limitation of pay increases. The second cornerstone is represented by a company-wide works agreement between the management board and the company works council (Gesamtbetriebsrat). According to this agreement, which is valid for all Mercedes Benz employees in Germany until 31 December 2000, pay increases are no longer calculated on the base of the actual effective wage level, but on the base of the (lower) wages agreed upon in collective agreements. Furthermore, extra payments for shiftwork and Saturday working are abolished. In return, Mercedes Benz will avoid redundancies and offer jobs to all vocational trainees (Auszubildende), around 2,000 each year. Furthermore, both sides will negotiate a new pay system.

Karl Feuerstein, chair of the company works council, assesses the agreement as a compromise that will ensure employment security for all employees of Mercedes Benz in Germany. Heiner Topitsch, personnel director at Mercedes Benz, underlines the importance of the package deal as a proof of the ability of the management board and the company works council to find adequate solutions that serve both parties' interests.