Extension of working time without wage compensation at Continental AG

A new works agreement signed in July 1997 at Continental AG foresees an increase in the working week from 37.5 hours to 38.75, without wage compensation.

On 1 July 1997 Germany's largest car-tyre manufacturer, Continental AG, announced the conclusion of a new works agreement for its tyre production plant in Hannover-Stöcken. The new works agreement, which affects about 2,700 employees at the Stöcken site, foresees a sharp reduction in labour costs mainly through:

• the extension of working time from 37.5 hours to 38.75 hours per week without any wage compensation;

• a step-by-step abolition of Continental's recent "payments above contract wages" (übertarifliche Leistungen). As a result, every employee will lose on average about DEM 76 per month in 1998 and about DEM 190 per month in 1999; and

• the abolition of the special premium (60% of the normal payments) for shift work on Sunday.

According to Continental management, the new works agreement is an important step towards regaining international competitiveness, and will help to make up savings of up to DEM 15 million. The president of the works council at the Stöcken plant, Karl-Heinz Dombrowski, said that the workforce were ready to accept the new works agreement under the threat of a possible plant closure. At the beginning of 1997, Continental's company chair, Hubertus von Grünberg, had announced that he planned to close one of the company's tyre factories in Germany, Belgium or Austria, but had not decided which so far. This announcement led to a competitive race amongst Continental's various European plants on cost-saving measures.

Given the new works agreement, the plant's management and the works council are both hopeful that there is long-term security for jobs and production at Stöcken. However, in contrast to similar works agreements in other companies, for example at Bayer AG (DE9706220N), Continental management gave no guarantee that it would avoid redundancies. On the contrary, Continental has already declared that by the end of 1997 there will be a further reduction of about 200 workers at the Stöcken plant, down to a level of 2,500 employees.