Wage cuts possible, says German chemical union

Abstract

An agreement to save industry jobs in their notoriously high-cost country has been reached between the German chemical industry employers' association—the Bundesarbeitgeberverband Chemie—and the workers' union—I.G. Chemie. For the first time, the agreement allows German companies to negotiate directly with a union local for reductions in employee salaries of up to 10%. Until now, 590,000 chemical industry workers in western Germany had negotiated as a block through their national union with the 1,700 companies of the chemical industry association on matters such as wages, vacation time, and work rules. This new pact will stem job losses in die German chemical industry, which cut 117,000 jobs between 1992 and 1995. It will have a particular impact at smaller chemical companies that have lost their competitive edge to lower cost foreign producers, says a spokesman for IG Chemie. The agreement empowers local workers' councils to agree to wage reductions when operations are in distress, but only for ...