European trade unionists react to restructuring plans at Siemens

German engineering group Siemens wants to cut 16,750 jobs from its 400,000 global workforce. The job reductions will affect all segments of the group and production sites in various European countries. European Works Council members and trade union representatives met for two coordination meetings organised by the European Metalworkers’ Federation in order to develop a trade union response.

Siemens’ restructuring plan

When Peter Löscher took over as the Chief Executive of Siemens in 2007, one of his major tasks involved remodelling the transnational enterprise to boost efficiency. On 8 July 2008, Siemens officially announced that it intends to cut 16,750 jobs, which corresponds to 4% of its global workforce of 400,000 employees. The company’s plans call for about 12,600 job cuts worldwide. An additional 4,150 jobs will be affected by restructuring projects. The restructuring plan for Germany envisages some 5,250 job cuts. In the other European countries, it is planned to axe 5,150 jobs, and outside of Europe the job reductions will amount to 6,350 units.

The cuts are part of a restructuring process which aims to streamline the way the German engineering group does business. The eight divisions that used to make up Siemens have been reduced to three: energy, healthcare and industry. These reorganisations and job cuts are intended to slice €1.2 billion from total costs by 2010.

Trade union response

In order to develop a trade union response, on 17 July 2008, 30 trade union representatives and members of the European Works Council (EWC) from Austria, Belgium, the Czech Republic, France, Germany, Slovakia, Slovenia, Spain, Sweden and the UK met for a coordination meeting organised by the European Metalworkers’ Federation (EMF). The trade unionists, as well as the members of the EWC, known as the Siemens Employee Committee (SEC), expressed their dissatisfaction with central management’s information policy as the SEC had not been informed about the details of the restructuring plan. In particular, the SEC had not been consulted about the plans to close the Siemens SKV plant in Prague. The participants of the trade union coordination meeting affirmed their objection to any plant closure and to forced redundancies.

On 22 July 2008, EMF informed the EU Commissioner, Vladimír Špidla, that, despite the information through the media about the planned restructuring at Siemens, the EWC had not yet received detailed information about the envisaged workforce reduction. In its letter to the Commissioner, EMF thus criticises the company for the fact that ‘elementary provisions of European law regarding information and consultation of workers have been disregarded in a blatant manner’.

European coordination meeting to support Czech employees

On 24 July 2008, EMF and the Czech metalworkers’ union (Odborový svaz Kovo, OS Kovo) met representatives of Siemens’ management in Prague. The trade union representatives criticised the information policy of Siemens in particular. One week later, on 1 August 2008, an extraordinary meeting of the SEC took place. On this occasion, the employee representatives were informed that the Siemens SKV plant in Prague is scheduled to be closed by 30 September 2009. In the case of the plant’s closure, 1,000 employees would lose their job. In order to support the Czech employees, a second European-wide coordination meeting organised by EMF took place in Prague on 19 August 2008. The trade unionists and EWC members from 11 countries reaffirmed their objection to plant closures and expressed full solidarity with the employees at the plant in Prague. The demonstration and the strike action which took place on 20 August 2008 were actively supported by colleagues from France, Germany, Italy and Slovakia, as well as from other Siemens plants in the Czech Republic and from other Czech companies.

As a result of the widespread protest on 20 August 2008, an agreement was reached for the employees at the Siemens SKV plant. The agreement includes efforts to preserve the facility by means of sale. In this case, Siemens will pay every employee a transfer bonus equal to a three-month wage. In case of a plant closure, Siemens will offer a severance pay equal to 16 months of wages. SKV will also ensure qualification-improving measures that will be financially supported for up to three months.

Conclusion

The global restructuring process at Siemens seems to confirm the need for a revision of the EWC directive (EU0803039I, EU0810019I). In particular, a strengthening of the definitions of information and consultation might improve the involvement of EWCs in restructuring processes. Only a definition that addresses issues such as quality, form and timeliness of information and consultation processes can guarantee that the objectives set by the European Commission for the directive will be met. A final political agreement of the proposed EWC ‘recast’ directive was expected at the European Parliament’s plenary session on 16 December 2008.

Volker Telljohann and Davide Dazzi, Institute for Labour Foundation, Bologna