New works agreement to secure investment at Ford Germany

In a new works agreement at Ford Germany, signed in April 1997, the company works council has agreed to a reduction of "payments above contract wages", while the management board has given assurances of new investments in Germany.

On 22 April 1997, the management board at Ford Germany and the company works council (Gesamtbetriebsrat) signed a new works agreement to secure investment. In the agreement, Ford management promises new investments at the five German Ford plants at Cologne, Düren, Berlin, Wülfrath and Saarlouis. Although the exact figures have not been published it is estimated that investments will total about DEM 10 billion in the next few years.

In return the company works council agreed to a reduction of "payments above contract wages" (übertarifliche Leistungen) and a further flexibilisation of working time. According to a recent study by the University of Hannover, two-thirds of all employers in manufacturing industry pay wages above those set out in collective agreements. The average wage drift between contractual wage and actual wage is about 10%. In the new Ford works agreement, it has been determined that the wages increases of 1.5% in 1997 and 2.5% in 1998, which were set at current branch-level collective agreement in the metal sector, will be compensated for by a reduction in "payments above the contract wage". Furthermore, the works agreement foresees a reduction of the previously high bonuses for late and night work to the collectively-agreed rate.

Regarding working time, Ford employees still work a 37.5 hours week. The difference between this and the 35-hour week, which was collectively agreed at branch level, will be compensated by 15 free shifts (105 hours) per year. The new agreement also introduces a working time "corridor "of 70 hours, including Saturday work. This means that only when an employee works more than 70 hours does the company have to pay an overtime bonus, which will be reduced from 50% to 25%.

The company announced that the new works agreement will bring cost savings amounting to USD 120 Million per year. The leader of the company works council, Wilfried Kuckelkorn, declared that the new agreement will secure jobs at Ford Germany for the next 10 to 15 years. After the Ford Motor Company announced, at the beginning of 1997, plans to cut 1,300 jobs at its UK plant at Halewood by shifting production from Britain to Germany (UK9702101F), it would seem that the German employees have been the winners in Ford's European restructuring plans.