Dispute over Grundig workers transferred to troubled company

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In October 1998, workers at OEM in Braga went on indefinite strike, seeking reintegration into Grundig, the firm which had transferred them to their current employer, which has run into difficulties. This is the latest dispute to hit the Portuguese electrical and electronics industries, where many jobs have been lost as multinational firms restructure.

Some 15,000 jobs with open-ended employment contracts have been lost in Portugal's electrical and electronics industries over the past four years, according to trade union figures, with many of the workers involved moving into precarious employment. Recently, considerable attention has been focused on the Grundig industrial complex in Braga, which is divided into seven companies that employ a total of about 3,000 workers. The unions are worried about what they regard as the dismantling of the largest industrial complex in this northern Portuguese district (PT9706125N) and the latest focus of controversy has been the OEM case.

Beginning in January 1998, the Norwegian-owned OEM began producing high-fidelity equipment after entering into an agreement with the German-based Grundig. OEM promised to retain 145 workers who had been permanent employees of Grundig. According to the Union of Northern Electric and Electronics Industry Workers (Sindicato dos Trabalhadores das Indústrias Eléctricas do Norte, STIEN), the OEM project obtained assistance from the Portuguese government, along with a guarantee of subsidies for investment in job training. The company stopped production in August 1998 due to non-payment of its suppliers, and employees did not receive their August salaries. In October, the viability of the project still seemed doubtful.

Doubts have been raised about the legal requirements involved in completely transferring activity from one company to another. The unions insist that Grundig cancel the contract with OEM and assume responsibility by reintegrating the employees into the company. The back salaries have, in the meantime, been paid, but the workers want alternative employment solutions. In September, the unions asked the government to intervene. They spoke to the Minister of Economy and Labour who promised them negotiations to solve the problem. In solidarity with other Grundig employees, 500 workers went to Lisbon to demonstrate at the parliament building.

In October 1998, the 185 employees of OEM decided to go on strike for an unspecified length of time and to return to demonstrating in the streets if Grundig did not reintegrate them into the company. The unions claim that it is known that Grundig is definitively pulling out of its hi-fi assembly-line operations in Portugal, and that German management has already announced that it will pay compensation in Portugal and transfer production to Germany.

The Portuguese state, acting through the Ministry of Economy, is negotiating with Blaupunkt and other companies in the same industrial sector. The unions have asked the local government of Braga to join in working toward a negotiated solution that would permit the workers to be integrated into another company in the Grundig group, namely GARP-Grundig Auto Radio.