Grundig closes a company in Portugal

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After several months of negotiations involving various local and central government agencies, a long struggle for jobs at Grundig came to an end in May 1997. In a region where workers reject job mobility, the only remaining recourse is the courts and political channels. Dialogue between the board of directors and workers' representatives has proved unsuccessful.

The dismissal process at the Portuguese operations of Grundig, the German-based electrical group, has involved the following phases:

  1. In November 1996 the Grundig Blaupunkt group, comprising six companies employing about 4,000 people in Braga, decided to sell business premises to Blaupunkt Electrónica, a subsidiary of Robert Bosch GmbH, to set up a motor components company. Grundig proposed the following means to deal with the resulting redundancies: guaranteed employment throughout 1997; mutually agreed terminations of contract; retraining; and transfers to other companies in the group. The organisations representing the company's employees - works councils and trade unions - called for close supervision of the futures of the 700 employees of the company facing closure and for all employees to be taken on by the new company, with the same guarantees, conditions and types of contract as they had had previously.
  2. In March 1997, the company announced the dismissal of 440 employees in 1997 on the grounds that the refusal to negotiate and accept that employees in the new company are to have fixed-term contracts would make the Bosch project unviable. It would have created 1,000 jobs between 1998 and 1999, with a gap of one year during which employees were to have left the company and be compensated. This was rejected.
  3. In April and May, Grundig sent notices of dismissal to 104 employees.

Negotiations over the redundancy plans with the group's board of directors involved the Government's local representative, the Ministry of the Economy and the Ministry of Training and Employment. Workers' representative organisations felt that the Government's involvement was fundamental, to back up any undertakings that were made. The Ministry of Social Security tried to break the impasse in the Bosch project, while a supervisory committee working with the local authority undertook to find employment for about 30 employees, and subsequently a further 70. As an alternative to dismissal and job insecurity, the Government proposed a retraining and social security plan, the creation of opportunities for self-employment and guarantees to workers over 50 years old. However, it was announced that the company was moving operations to Hungary.

In November 1996, and again in March and May 1997, several steps were taken to fight the closure, including strikes and road blocks. In May the struggle took a harder turn, with longer strikes, the locking-in of directors, street demonstrations, occupation of the premises, marches and vigils, protests in Oporto and hunger strikes. The unions threatened to bring the city of Braga to a standstill.

The dispute has been led by a regionally based organisation, the Braga Trade Union Federation, and has succeeded at times in achieving the support, mainly at the start, of 4,000 strikers and the backing of a remarkable number of union leaders and activists from other companies, as well as parties of the extreme left.

The Northern Union of Electrical Industry Workers (Sindicato dos Trabalhadores das Indústrias Eléctricas do Norte), an affiliate of the CGTP confederation, is asking the courts to annul the redundancies carried out by Grundig, citing the lack of economic grounds. The union has affirmed its confidence in the courts.

Workers' organisations continue to advocate the need for a retraining plan without dismissals to maximise job security. They have not accepted the training plans, because they do not want to see workers with specialist skills left at home, and vocational training would only postpone the problem because there is no viable prospect of employment. They state that the Government had the opportunity to apply economic sanctions to the German group, because the latter had obligations to Portugal and the region, having received investment subsidies from the Government and the European Community.

This is a case in which positions have polarised, with both sides trying to safeguard its interests to the utmost. Neither side has shifted its position throughout the conflict. Recently, it was announced that a meeting of the Trade Union Council for Galicia (Spain) and North Portugal (where the company is situated) has decided to seek to "expand the establishment of European Works Councils within transnational groups that have a presence in the region".

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