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A Tale of Two Systems


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I know which one I'd like.....

As usual, you have cherry-picked the article and ignored the obvious contradictions. Outside of Germany, the German automakers have mainly non-union factories in anti-labor jurisdictions that were chosen for that reason. Okay? Now, if, say, Qantas does that with a Singapore-based non-union subsidiary, people here - you included - take that as proof positive that there is a nefarious plot afoot to screw "mainline" and use that as the rationale to oppose Air Canada's LCC plan, even though Air Canada couldn't legally operate an overseas based airline flying into the Canadian market. So the Germans arbitrage their local wages by investing heavily in low-wage markets abroad. How many German jobs does that cost the German economy. And that applies heavily throughout German industry. Their plants at home may showcase their technology and expertise, but most of their investment in new manufacturing capacity is being done in low-wage countries. For example, I'm dealing right now with a German industrial component manufacturer that has its main plant in Germany, and has for all 66 years of its history, but the six other plants it operates are all in low-wage countries and a seventh is under construction in India.

What the German automakers also do is lean heavily on automation, not just at the assembly level, but in their parts plants. If you've ever seen a casting plant in Germany - and I have - you have a very highly automated environment, even more so than the US plant model. There is no union opposition to automation - it is a given that Germany should be a leader in automated production and that resisting automation would be tantamount to featherbedding. North American unions, on the contrary, put job protection above productivity, which is why you had CAW agents people pushing wheelchair passengers at AC. Union willfully maintain cost inefficiencies linked to protecting jobs rather than engage in workforce optimization protect jobs only so long as the employer doesn't go out of business, spurred there in part by this very featherbedding.

There are other factors in play, some of which we have in Canada but not the US - the state, not the employer, provides basic health insurance. That tends to facilitate programs like work-sharing during periods when demand is down and there is a need to reduce the size of the payroll. In the US, employer-based health care is a deterrent to job or work sharing.

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As usual the point was missed...

I will use this quote from the article to break it out for you.

In addition to high trade union density supporting the power of German autoworkers’ wages, the German constitution itself includes a second mechanism for keeping employees involved in the decisions of the firm for which they work. The Works Constitution Act provides for the creation of Works Councils in each factory. The Works Councils provide a mechanism through which a company's management must work with employees, whether they are in a union or not, on issues affecting work life, such as shop floor conditions, scheduling shifts, and other issues particular to the factory. This system, according to Mund, institutionalized “direct contact for workers’ representatives with management at various levels, from lower to middle to senior management in daily affairs. So you exercise some kind of dialogue where you don’t always wear your management pin or your union pin.”

Mund points out that the German example goes “against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages…despite our possibility to influence companies, the economy is working well in Germany.”

Then again, there is your side of the arguement presented...

When asked why German firms operate so differently with respect to labor in different countries, Claude Barfield, a resident scholar at the American Enterprise Institute where he studies international trade and globalization, told Remapping Debate that they do so, in part, “because they can get away with it so far.”

I still know which side of the Tale I'd like to be on :wink_smile:


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