[EDITORIALS]Germany’s model relations

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[EDITORIALS]Germany’s model relations

The management and labor union of Volkswagen, Europe’s biggest automaker, agreed to extend the workers’ maximum working hours from the current 28 hours to 33 hours a week, while freezing wages. In exchange for the shift, which slashed workers’ hourly wages, management promised it would guarantee stable employment through 2011.
The company’s management had initially planned to slash 20,000 jobs by 2011 as it relocated six of its production plants overseas. Certainly the labor union vigorously protested against the move, but the company’s falling market share and increasingly fierce competition prompted them to change their minds.
The latest agreement between management and the labor union was a groundbreaking decision that improved the company’s competitiveness by reducing labor costs, while the workers were guaranteed much-needed stable employment.
Such compromise between the management and labor union is becoming increasingly common in Germany, once well known for traditionally hard-line labor unions.
For instance, the management of Hawe Hydraulics, a German producer of hydraulic component valves, pumps and other switches, agreed with its labor union to relocate its plant in India back to Germany in exchange for extending the working hours. The decision came as workers are increasingly willing to work longer as long as there is a job for them. Germany’s economy, based on such new management-labor relations, is expected to expand about 2.5 percent this year, extricating itself from the low growth rate of slightly above 1 percent. Germany is no longer the “sick man of Europe.”
Certainly Germany’s labor environment is different from Korea, but it is worth watching what kind of efforts the company management and labor unions in Germany are making to survive.
Our management-labor relations, which unfortunately rank 114th in the world, are only driving businesses and jobs out of the country.
The labor unions and companies need to keep in mind that it is better to maintain jobs by making some compromises than shut down whole production plants.
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