Industrial restructuring and industrial relations in the European car industry: Instruments and strategies for employment

Bob Hancké

No FS I 98-305, Discussion Papers, Research Unit: Economic Change and Employment from WZB Berlin Social Science Center

Abstract: This paper deals with the situation in the European car industry since the crisis of the early 1990s. After a short review of the structural problems of the industry and the main responses by car manufacturers, the discussion shifts to a detailed analysis of labour union responses. The paper discusses two broad stages in labour responses. The first consisted of the traditional social plans and early retirement measures that had been at the core of labour union strategies before. The second is a broader strategy, which trades working time reduction, working time flexibility and wage concessions for job security and investment guarantees. A detailed analysis of such agreements in five carproducing European countries - Germany, France, Spain, the UK and Belgium - as well as two detailed case studies of the competitive dynamic between local unions in different countries prompted by these agreements -- in GM Europe and Renault -- illustrates the main strengths and weaknesses of this strategy. While these agreements may be able to secure employment, they also install a competitive spiral on working conditions among unions. The paper then discusses the contours of an alternative strategy that attempts to avoid interunion competition, and the role for institutions such as European Works Councils in this alternative.

Date: 1998
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