DrFaust:

This is interesting on the BBC today.

http://news.bbc.co.uk/2/hi/business/8341870.stm

Seems GM wouldn't buy the German workers' demands, and--on schedule--they're threatening strikes.

Bill,

They announced Ford had a profit of one billion (B) dollars for the 3rd quarter and they did not take a penny of the "bailout" money!

That was with union workers and all the other problems GM has.
Time to stop blaming unions for everything and look at sloppy, lazy managers and stock holders that demand a 10% return and do not care about product

Bill

Ford also did not negotiate the good terms that GM negotiated with the AWU. Expect Ford to do badly in the future due to union excesses.

Viking:

You can't possibly be viewing this from the viewpoint here. German unions are far more powerful than US ones are. But the labor laws in Germany allow them to be so, and I can't see an American firm putting up with it. This seems to be what has happened.

The unions here don't care if their outrageous demands drive the company into bankruptcy, which is going on all over the place here. Either that, or the company is moving its operations out of Germany.

When the employer goes under and the threat of unemployment looms and finally dawns on union leadership, the first thing you hear is "Save our jobs". They evidently expect the company to run at a loss just so they can keep their jobs.

Viking:

As I read the afternoon news here, the German government is all upset about GM's decision. The finance minister calls it "unacceptable", as though he had the choice of accepting or not.

The unions are threatening strikes, and as I read it, GM is basically saying, "You do, and we'll shut down the plant".

Should get interesting.

Experts are predicing the closing of the plants.

The interesting aspect of this whole fracas is that the Germans are expecting to force GM to do things under German labor law, and GM isn't buying it, because they're not subject to it.

Bill,

after all there is freedom of coalition. You may not like Trade Unions but they have by far not the devastating effect you describe in Germany. As I mentioned in an earlier posting, Germany was the only country in Euope that cut down its per unit costs considerably. Three million new jobs were created in a few years. And this was the result of an overall quite reasonable and responsible approach of the German unions that accepted almost all the bitter pills they were offered by the employers. Germany has gained considerably competiteveness compared to other European countries. I have a very different perception of the economic situation in Germany than you.

As for Opel: it is an open secret that GM is practically bankrupt. One of the few assets GM still has that have any value are the patents developed by Opel but owned by GM. It is therefore not at all surprising that GM wants to keep Opel. Without Opel, GM has no chance to survive the next years. This has absolutely nothing to do with any statement of the German unions.

Bill,

"The interesting aspect of this whole fracas is that the Germans are expecting to force GM to do things under German labor law, and GM isn't buying it, because they're not subject to it."

As far as Opel is concerned: of course Opel, like any other company acting in Germany is subject to German labour law. Closing a factory or a company is subject to the 'Mitbestimmungs' law.

Opel has to pay now mainly for the mistakes of GM, and that's of course outraging. The workers have the feeling that they have to pay for mistakes of the US management.

DrFaust:

That's precisely the point. Opel operates under German labor law. GM doesn't.

American labor law doesn't recognize any "Bestimmugrecht" from the workers at ll, and as you pointed out, why should they? They get paid for their work, and that should be the end of it. I, too, would shut my company down before I'd let the workers tell me how to run it.

" The workers have the feeling that they have to pay for mistakes of the US management."

Actually, the German workers have to pay for the American Auto Workers Union exhorbitant, gold-plated compensation and benefits packages. If you can't sell cars, you shouldn't have expensive paid work force. The management is to blame for giving in to the AWU's demands and not busting the damned union and/or closing the Detroit factories 20 years ago.

DrFaust:

I have to assume that you grew up in the German system. I didn't. One of the reasons so many companies here in Germany are either going broke or moving is that they have so much of a load put on them that they've been unable to compete in a free market. The biggest cost factor is labor.

German workers are paid way over their market value, and they get longer vacations than anywhere else I've been, plus all the side benefits, like Christmas pay, vacation pay, and all those good things they really should save up for and finance themselves. Then the government comes along with taxes and "social" contributions. So between the employees and the government all the costs of the society are heaped on the employers, and they can no longer stand up under the load.

That's a factor not limited to Germany; I've seen it all over Europe. The thinking is much different than ours. Americans will sit down and ask "What can we do about this?", whereas Europeans will sit down and ask, "What's the government going to do about this?".

My lawyer says the laws get changed so often that it's difficult for the professionals to keep up to date.

Bill,

it was not the German Mitbestimmungs law that brought GM to bankruptcy! And GM is not closing the factories because they don't like the German law. Mitbestimmung exists since 1920, it is not a new thing and so far it has worked very well. If it is such a catastrophe, how was it possible that Germany was economically so successful? As I mentioned before, I have a very different perception than you in this point.

Fungus

" If it is such a catastrophe, how was it possible that Germany was economically so successful?"

Why do you choose to operate in Bulgaria and not in Germany?

Bill,

"One of the reasons so many companies here in Germany are either going broke or moving is that they have so much of a load put on them that they've been unable to compete in a free market."

When someone who doesn't know Germany is reading your comments, he will have the impression that the German economy is collapsing and that the country is in ruins. This is of course not according to the reality.

First of all, regarding competiteveness: it is not the cost of labour, it is the productivity and the unit costs that are decisive in the competition. Contrary to the popular belief, German labour is not so expensive, when you compare it with the productivity. High salaries are reflecting high productivity, and I think Germany should not compete with China when it comes to labour intense production.

Second, if you check the foreign trade statistics before the crisis (which is a banking crisis, not the result of exorbitant rises of salaries) you will find out easily how competitive the German economy is. As far as I remember Germany was No. 1 in exports all over the world, even before China and the US. And compare that also to the number of inhabitants of the three countries. I guess then you will have to rethink your statement.

Bill

You are right, and Fugus is wrong, as usual. Germany is doomed. Its manufacturing base is eroding just as quickly as the US and there is nothing replacing it. In the US we had the IT bubble (which burst) and then the real estate bubble (which also burst). In Germany--nothing. No agriculture to speak of, and no manufacturing. At least the Americans are creative and will come up with anoter bubble. Germany has only bad ideas--Nazism, Marxism, the atom bomb, Fungus...What next?

Bill,

as for the taxes in Europe: they are maybe higher in some (not all) European countries than in US, but this is very easy to explain. Social security and public goods have a much higher value in the mindframe of Europeans than of Americans. The result is that your beloved Bayreuth is in Germany (highly subsidized like hundreds of other theatres, operas, orchestras, museums). If it was in US, it would be sponsered (or not) by some big companies and rich private donors.

I am not saying that the European system is necessarily better, but most Europeans have the feeling that they live quite comfortably and secure. So very few people really want to change this, and I can understand them very well.