Pirelli returns to 40-hour working week

In December 1998, a works agreement was concluded at the tyre company Pirelli Germany, which includes a return to a 40-hour working week from 1 January 1999.

In December 1998, management and works council at the German subsidiary of the multinational tyre producing group Pirelli concluded a works agreement, according to which the company will reintroduce the 40-hour working week from 1 January 1999 at its production location in Breuberg/Odenwald.

Pirelli is subject to the rubber industry umbrella agreement for the federal states of Hessia, Lower-Saxony, Rhineland-Palatinate and Saarland. This agreement includes an "opening clause" which allows, by means of a works agreement, for an extension or reduction of working time by a maximum of plus or minus 2.5 hours around the regular 37.5 hours working week, with equivalent wage adjustment. If the opening clause should apply for larger parts of establishments or complete establishments, the sectoral bargaining parties have to approve the deal.

The Pirelli agreement also includes an additional incentive pay programme in the form of profit-sharing, which is to be agreed by 31 March 1999. Furthermore, all employees will receive a voucher for Pirelli tyres worth DEM 600 in 1999. Management has promised not to make employees redundant until the end of 2001 and to reduce the outsourcing of services.

By means of this agreement, the German Pirelli subsidiary intends to close the cost gap between Breuberg and other Pirelli production sites in Italy, Spain and England. Competitors like Dunlop, Fulda and Continental returned to the 40-hour working week at their German establishments some months ago.

Klaus Betka, managing director for production at Pirelli Germany, regards the agreement as inevitable in order to secure Germany as a production location within the Pirelli group. After the agreement was concluded, the group headquarters in Milan (Italy) promised further investments and the extension of annual production from 6.3 million to 7.5 million automobile tyres.

Norbert Schäfer, chair of the Pirelli works council, stated that it had not been easy to agree to the deal. The works council had had no choice since most of the companies' competitors had already implemented equivalent measures. If, due to the agreement, the competitiveness of Pirelli Germany within the group and the market improves permanently, and thus secures jobs, the conclusion of the agreement would be worth it in the interest of the employees. Mr Schäfer also said that the works council was not prepared to agree to further concessions.