Opel Belgium: more flexible work organisation reduces redundancies

In October 1997, Opel Belgium announced that the workforce at its plant in Antwerp was to be cut by 1,700-1,900 jobs. In accordance with the company's traditional practices (and unlike the experience of Renault Vilvoorde), negotiations with trade unions began immediately and a plan was agreed which was ratified in a workforce referendum in February 1998. A new shift system involving night work and "outsourcing" of the materials-handling department within the Opel group mean that jobs losses can be kept down to 1,600.

The dispute surrounding the closure of the Renault Vilvoorde plant (EU9704118F) had barely been settled and the emotions aroused by the closure were still raw when, in October 1997, the management of Opel Belgium in turn announced a new slimming down of the 7,800-strong workforce at its plant in Antwerp by between approximately 1,700 and 1,900 jobs (BE9710222N).

The incentive for this second reorganisation in five years at Opel's Antwerp plant was the enforced decision by headquarters in Zürich to make drastic savings (BEF 3.5 billion) and to cut car production from 380,000 to 300,000 cars per year. In order to achieve this reduction in production, only the Astra assembly line would remain open, while the Vectra assembly line in Antwerp was to close. This is one explanation for the high number of potential redundancies, since the Astra model is much smaller and therefore involves fewer workers.

Draft five-year collective agreement

Opel Antwerp has a tradition of resolving problems through mutual consultation; strikes at this plant are extremely rare. The fact that the trade unions and management immediately gathered round the table to negotiate a restructuring plan came as a surprise to no one. It provided an advance guarantee that these negotiations would lead to an acceptable solution.

After a bargaining period lasting approximately two months, a draft settlement emerged. It focused on a collective agreement covering a period of five years, which is unique, purely in terms of duration, within the Belgian tradition. The draft agreement contained a job security clause valid until 2002, with a corresponding investment programme as a "guarantee plan", limited wage increases and a guarantee that wages will continue to be index-linked. Furthermore, the company would submit an application to the Minister of Employment as a company undergoing restructuring, which should provide for an early retirement scheme from the age of 52, so that a number of unavoidable redundancies could be phased in "gently". The agreement also provided for the more flexible deployment of employees, depending on whether more or fewer cars have to be produced, seasonal fluctuations, any problems with suppliers and as a function of the holiday schedule. The traditional annual holiday closure is being abolished.

Internal outsourcing saves some jobs

Some of the redundancies will be avoided by "outsourcing" the materials-handling department internally, rather than externally. The department is incorporated into a separate public limited company (NV) for materials handling, but this company remains part of the Opel group. This new company, known as "Plant 3", continues to form part of the same technical business unit and the same sector and has the same worker participation bodies as the two other Opel plants. The 645 Opel employees who are transferred to the new NV retain their rights. The reduction in employment conditions which often goes hand-in-hand with this type of outsourcing operation, because in theory the employees end up in another sector with different pay and conditions, is temporarily avoided in this case. However, different pay conditions apply to new recruits.

Choice between two shift systems

The core of the agreement contained two proposals for a new form of work organisation, and workers could choose between them in a referendum. The options involved working within either a three-shift or two-shift system. The three-shift system involved one shift from 06.00 to 14.00, a second from 14.00 to 22.00 and the third from 22.00 to 06.00 on one production line. Within this scheme, employees would work one hour longer for the same wage as they earned now. If this system were chosen, 1,600 jobs would be lost. This was the proposal favoured by the trade unions.

The other proposal involved a two-shift system, one from 06.00 to 15.00 and one from 15.00 to midnight, within a four-day week, Monday to Thursday. After that, one shift would work 10 hours per day from Friday to Sunday. Under this system, employees would suffer a serious cut in wages of between 10% and 20%, but more jobs could be saved. In this case, only 993 jobs would be lost.

Referendum chooses three-shift system

Both proposals were put to the workers and management in a written referendum in February 1998. The turnout in this referendum was particularly high: 90% of all staff cast a vote. The draft agreement was accepted by 59.9% of workers and 62% of the management staff; approximately 31% of employees rejected the agreement. Approximately 60% of employees chose the three-shift system, including one night shift. The second proposal, which implied that more jobs would be saved because only four days per week would be worked, proved unacceptable to the majority of employees. A clear choice was expressed in favour of maximum retention of current wages.

Both the management and workers reacted with satisfaction to the result of the referendum. The three-shift system is more suited to the company's needs, is future-oriented and provides the best guarantees of income, job security and humane working conditions.

The 30% "no" vote was interpreted as a signal to the management to implement the agreement as humanely as possible. One possible explanation for the number of votes against is the fear of night work. Initially, volunteers will be sought. Then, the trade unions and the management will examine the extent to which employees on a temporary contract can be considered for such work. Only if these methods produce insufficient candidates will night working become compulsory. A number of people are clearly against this solution.

Commentary

Workers and management at Opel, in approving this agreement, have consented to more flexibility if demand rises or falls or if supply problems arise as a result of the "just-in-time" system applicable in all companies within the automotive sector for handling materials and component parts. With this system of flexibility, Opel wants the plant to operate to the rhythm of market demand, or as what it calls "a breathing factory".

In other companies in the sector, such as Volkswagen, the trade unions are obviously now more prepared, within the terms of collective agreements, to respond to the demand for more flexibility. In other words, the impact of the closure of Vilvoorde is clear: "The Vilvoorde drama affected everybody; it was a sobering experience and it affected our self-confidence. Everyone has now clearly understood that the considerations affecting the decision to move production are not purely European, but primarily international," said one of the trade union negotiators.

Does this type of agreement on flexibility avert all the risks to employment within the sector? Experts seriously doubt that this is so - in the years to come, competition from Japan will certainly not diminish. In 1997, Japan increased its EU market share to 11.6% and from the year 2000 all import restrictions on Japanese cars will be lifted. Companies such as Toyota, Nissan, Honda and Mitsubishi are planning to set up production units in Western Europe, whilst the Japanese themselves remain very insulated from foreign investors. The global problem of overcapacity will remain; in 2000, the annual production capacity of the Western European automotive market will be approximately 19,087,000 vehicles, while market demand is estimated at approximately 13,600,000. The question is whether "breathing factories," which operate to the rhythm of demand, will bring the calm and security to the car world on which 30,000 Belgian car assembly workers are relying. With 12.34 assembled cars per 100 inhabitants, Belgium will continue to be the number-one car assembler for the time being, followed by Japan and Germany, but for how much longer? (Peter van der Hallen, Steunpunt WAV)

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