The Transnational Activities of German Trade Unions and Works Councils: From Foreign Policy to Active Engagement

Abstract

An imbalance at the heart of the German economy – habitual current account surpluses – has a crosscutting impact on unions in the tradeable goods sectors. Export surpluses boost employment, but they also necessitate capital outflow. Decades of investment abroad by German transnational enterprises has created global supply chains where costs are lower and employee representation weaker. Production abroad has exposed German managers to far more confrontational employment relations regimes than the social partnership practiced at home. These trends portend to increase German firms’ leverage over domestic unions. To meet these challenges, German trade unionists have experimented with exporting power. This contribution evaluates five cases: (1) efforts by the German metalworkers union (IG Metall) to coordinate collective bargaining with unions in neighbouring countries; (2) IG Metall's assistance in unionization drives in the US auto industry; (3) IG Metall's undertakings to strengthen the Hungarian mechanical engineering union; (4) the work by IG Metall and the Siemens enterprise works council to obtain a neutrality agreement for US unions; and (5) cooperation between the German service employees union, ver.di, and the Communications Workers of America to organize T-Mobile USA. The research shows that unions still have an extraordinarily difficult time exporting power beyond national borders.

JEL Classification:

• F23
• J5

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author.

ABOUT THE AUTHOR

Stephen J. Silvia is a professor of international relations and affiliate professor of economics at American University in Washington, D.C. Prof. Silvia's research specializes in comparative labour and employment relations, with a focus on Germany, the European Union and the United States. He is the author of Holding the Shop Together: German Industrial Relations in the Postwar Era.

Notes

1. This examination focuses only on trade unions in the Federal Republic of Germany before German unification because the structure and activities of the unions of the German Democratic Republic have no explanatory impact on the international activities of the trade union movement in unified Germany for the topic under investigation here.

2. Although using a combination of inflation plus productivity is widely accepted among trade union officials as the material target in collective bargaining, it is controversial outside of trade union circles. Most business representatives and many economists point out that it is not obvious which price and productivity indices to use, or whether the scope should be at a sectoral, regional, national or European-wide level. The formula also leaves no room for adjustment to exogenous shocks (e.g. changes in the price of oil).