When I looked through the case study for this
week, ‘Employment relations in the banking and automotive industries in
Germany’ by Haipeter, Jürgens and Wagner (2012), I was particularly interested
in staffing reductions and job security due to globalization in Germany’s
automotive industry. Based on some of the articles that have been
released on the subject of globalisation and its impact on Germany, it was
clear there is much debate over whether Germany will benefit as a whole, or if
it just meant workers are going to be worse off. Words like ‘aftermath’ and ‘catastrophic’
were used… it was intense. So, I thought I would focus my post on the benefits
to Germany’s automotive industry, the consequences for the employees, and what this means for Germany's employment relations.
Germany’s traditional employment relations
system shifted away from high job security and high pay, due to
the effects of globalisation. Offshoring and the increase in the use of agency
work in the auto industry has led to staff reductions, and many believe that
this poses a serious threat to the future of the German labour market. However,
union activity has been strong and served to fight against decreased job security. Unions
have been able to hold some control over bargaining strategies on workers’
behalf, and have needed to be forward-thinking and flexible in their approach. The union activity is promising, and as discussed in the case, Germany’s employment relations are
still seen as being generally coordinated as a result.
I found an interesting article by Eric Heymann
(2012) that highlighted the benefits that globalisation has had for Germany. In his opinion, the benefits of the globalised auto market
have given the industry the shot it needed to grow and expand successfully.
Heymann states the industry growth of 25% in 2010 has put Germany on the front
foot, and the gains in market share have been advantageous for Germany’s
economy. A definite struggle exists between organisations who need the market share and profitability to survive, and their
employees who are a factor in the cost of production. I’m sure management would
have like to keep their production solely in Germany. However, given the
opportunities for low cost labour overseas and the success it has generated, I
do not see how this can be a viable option for them.
I’m interested to see what
the future holds in terms of the effects of globalization, and whether there
will be a definite shift toward the decentralization of Germany’s employment relations.
For more information on Heymann’s article,
please follow the link below:
Hi Hayley,
ReplyDeleteInteresting blog post and article!
The graphs in your article that you linked are especially interesting I found and help to put things into perspective. I like that you decided to look at the benefits also.
The automotive industry in Germany seems to have fluctuated over the years but it seems that as a result of the growth of 25% in 2010 the automotive industry is doing well in Germany. As you mentioned, as much as I'm sure Germany would have liked to keep production within Germany I think it is important that Germany avail of the low cost oversea labour costs in order to improve profitability and market share.
Globalisation seems to have effected Germany in many different ways as you have mentioned. Although high pay and high job security has disappeared union activity has played a big part in ensuring that jobs or secured and that employees don't lose their jobs. Unions play an important part in Germany's economy, especially since globalisation has shifted the way the economy runs.
I found your blog post interesting and informative!
Louise :)
Hayley, great blog post!
ReplyDeleteFrom studying employment relations in Europe last week, Germany was identified as one of the nation-states who will perhaps move towards an Anglo-American approach however this is debatable as it is evident they are still following the dominant characteristics of European employment relations. This is shown by the influence of unions that you have mentioned and how they still play a crucial role in regards to collective bargaining.
It is good to see the comparison of both the positives and negatives of globalisation on Germany, particularly as most articles tend to focus on the disadvantages it has had on countries and their employment relations!
I agree with the article and the idea that keeping production solely in Germany is unfortunately, an unrealistic goal. As written in the article - German car makers’ foreign manufacturing is likely to continue expanding faster than domestic production going forward.This is a disadvantage for those living in Germany as it will most likely result in higher unemployment levels, combined with the loss of high job security and high pay for those that do not lose their jobs.
Perhaps the reform of the European social model could bring about a more positive picture of Germany's future in regards to employment relations!
-Sian :)