DaimlerChrysler Deal Points The Way For Longer Hours, Less Pay In Germany

By Agence France-Presse The compromise reached by management and unions at DaimlerChrysler on July 23 over a 500-million-euro (US$615-million) cost-cutting package could act as a precedent for other companies in the battle for longer working hours and less pay in Germany, observers said. The head of the German-U.S. carmaker, Juergen Schrempp, said the deal would serve as "a role model for Germany as a production location." Germany "does not need general regulation on working hours or a debate on the number of holidays," Schrempp said. "Companies need more room for maneuver to react to the rhythm of orders. They need greater flexibility." Chancellor Gerhard Schroeder hailed the deal as a "triumph of reason." Schroeder said in a statement: "It is a forward-looking agreement that meets the demands and needs of both sides. It enables the company to be more flexible in the increasingly fierce international competition and will safeguard jobs at German sites." Management and unions at DaimlerChrysler had shown that "agreements on working hours can be tailored specifically to the needs of each individual company," without any rigid ideologising, the chancellor continued. Schroeder said the deal "will contribute to a strengthening of the economic recovery." And it could also show the way for rival car maker Volkswagen as it seeks ways of cutting costs after losing ground to rivals in key markets and booking a sharp fall in profits in the first half of this year. Aside from DaimlerChrysler and VW, other major German companies, including auto-parts maker Continental and Bosch, truck maker MAN and electrical giant Siemens, have recently been pushing for pay cuts and longer working hours to improve competitiveness. Copyright Agence France-Presse, 2004