European Employees Forum react to General Motors outsourcing plans

General Motors (GM) is attempting to push through outsourcing plans that could lead to extensive redundancies within the company throughout western European countries. GM’s European Employee Forum has responded to such a move by demanding that management respect existing agreements and conclude a European framework agreement on restructuring – a demand first made by employee representatives in April 2007.

Outsourcing drive at GM

As a means of stemming its massive financial losses, estimated to be in the region of USD 38.7 billion (about €24.9 billion as at 7 May 2008) in 2007, General Motors (GM) is committed to a radical restructuring programme. Part of this reorganisation involves substantial job cuts combined with a new outsourcing policy. In North America, for example, GM announced that it would offer 74,000 of its employees a redundancy package in February 2008. However, it remains difficult to estimate how many workers will accept GM’s offer.

Europe is not immune to GM’s restructuring strategy either. Despite the fact that General Motors Europe (GM Europe) recorded a profit of USD 55 million (€35 million) in 2007, this was much lower than the USD 357 million (€230 million) gained in the previous year. As a means of addressing this decline in profits, a number of European manufacturing plants face a new wave of cuts – indeed, it is widely believed that no plant is safe from such threats. At the company’s German headquarters in Russelsheim in the west of the country, for instance, GM plans to cut 1,000 jobs following the outsourcing of certain tasks to suppliers. Such restructuring moves have not been restricted to GM’s main European market. The company’s plans involve a new business strategy for its Astra and Vectra models that could have consequences for employment levels and possible plant closures at GM locations in Belgium, France, Spain and the UK.

Production shift towards the east

Overall, GM’s plans for its plants in eastern Europe countries are a major concern for workers in the ‘old’ EU Member States. Now in possession of production sites in Russia and other former Soviet-bloc countries, GM is no longer dependent on western exports, particularly exports from German plants. According to a report by the European Foundation for the Improvement of Living and Working Conditions – Trends and drivers of change in the European automotive industry: Mapping report (599Kb PDF) – auto manufacturers have invested heavily in eastern European countries in recent years. Within the automotive industry as a whole, substantial economic growth is taking place outside of the EU, in countries like Russia, India and China; consequently, the European Commission and the relevant social partners have set up a European partnership aiming to anticipate change and manage restructuring (EU0711029I).

Efforts of European Employees’ Forum

Negotiations towards a restructuring agreement

GM’s European Employees’ Forum (EEF) – the official name given to this body founded under Council Directive 94/45/EC on the establishment of a European Works Council – appeared to have reached an important breakthrough in April 2007, with GM management committing in principle to signing a framework agreement on restructuring. However, the well-organised EEF, as evidenced on many occasions by its ability to coordinate European-wide work stoppages (EU0706019I), has so far been unable to reach a European framework agreement on restructuring within the Astra manufacturing plants. A particular concern relates to the uncertain future of the company’s Antwerp site in northern Belgium.

Response to company change at local level

Nevertheless, the lack of a framework agreement on restructuring has not deterred GM management from trying to push through change at local level, a move which can only be interpreted as questioning the authority of the EEF. In Zaragoza, GM’s plant in northern Spain, workers reacted angrily to management’s recent announcement that it planned to outsource certain tasks which would lead to 900 redundancies.

Call for framework agreements to be signed

Strike action on 14 March 2008 came a day after the EEF and the European Metalworkers’ Federation (EMF) met in the city of Frankfurt in central Germany to discuss GM’s plans to both improve productivity and outsource jobs. At the meeting, the following key points were agreed:

• to refuse management plans which are neither a part of existing negotiations nor agreements;

• to request that management agree to the European framework agreement for Astra plants, as well as the future of the Antwerp plant;

• to require management to agree to a framework agreement on outsourcing;

• to halt local and national-level negotiations until management agree to sign the outstanding framework agreements.

EMF responds to GM’s approach

The EMF’s Company Policy Director, Tony Murphy, who is responsible for the automotive sector, claimed that GM ‘keeps moving the goalposts’. He continued: ‘They are telling us one thing and then doing something else.’ The EMF highlighted that GM had promised to reach an agreement on outsourcing before announcing any redundancies. However, Mr Murphy noted that GM ‘have reneged’ on such a promise, with GM management trying to push through outsourcing packages at a local level.

Commentary

According to the European Trade Union Institute for Research, Education and Health and Safety (ETUI-REHS), about 784 European Works Councils (EWCs) currently exist. Of these, GM’s EEF has gained a reputation as being a body able to organise European-wide employee action. Once again, the EEF has responded collectively to the company’s outsourcing and productivity demands. In recent months, the EEF’s General Motors Workers Blog has demonstrated that workers across Europe are ready to support each other in their common fight to save jobs and force management to enter into negotiations over outsourcing.

Michael Whittall, Technical University Munich