GERMANY : Metalworkers’ Strike a Test for Economy

In the wake of an overwhelming strike vote this week by 165,000 metalworkers in the southern state of Bavaria, Germans are wondering how far the labor conflict in Europe’s most pivotal economy will escalate.

The stakes are high. The metalworkers make up the country’s largest labor union, IG Metall, with 3.5 million members in about 8,000 companies. Most of them work in Germany’s all-important manufacturing sector. The last time they struck, in 1984, the conflict lasted several weeks and knocked nearly half a percentage point off the country’s annual domestic growth.

In addition, the metalworkers are being closely watched by other German labor unions. If the metalworkers win an appreciable pay increase, other unions will seek the same in their own bargaining rounds this year.

Substantial wage increases could, in turn, trigger a tightening by the inflation-wary German central bank. If, at the end of the current metalworkers’ dispute, the Bundesbank perceives IG Metall’s gains as too expansionary, it might raise interest rates, dampening the nascent German recovery, which is needed to promote economic growth across the rest of the Continent.

So far, Bavaria’s metalworkers are the only ones to have decided formally to strike. Elsewhere, the metalworkers have been staging on-again, off-again “warning strikes” lasting a few hours and intended to show that the workers will strike in earnest if pushed far enough.

Even in Bavaria, the metalworkers are talking tough but showing restraint. Their strike is the first by manufacturing workers since the 1986 enactment of labor laws that limit the way unions can subsidize non-member workers who are indirectly affected by a strike.

Unable to shield non-members, IG Metall has designed a cautious strike program that has started at a small number of firms and is scheduled to spread in steps over the next two weeks.

Firms were chosen so as to do the least possible harm to workers at companies that supply parts and raw materials.

Significantly, the important Bavarian auto maker Bayerische Motoren Werke, which makes BMW cars, is not in the current strike plans.

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“The agreed-upon strike will destroy neither our opponents nor the economy,” union President Klaus Zwickel said.

But the lack of all-out militancy has raised questions about how effective a limited strike can be.

Compounding the union’s disadvantages is increasing acceptability in Germany of the idea that labor’s problems are partly of labor’s own making.

For decades after the war, German managers were largely willing to accommodate workers’ demands, convinced by history that a well-paid, tenured work force was essential to political stability.

But all those years of pay increases and generous benefits have made German labor the costliest in the world.

Figures from the U.S. Bureau of Labor Statistics show that German manufacturing workers enjoyed the highest number of vacation days in the industrialized world in 1991--42.5 per year, compared to 22 in the United States and 31 in Japan. They also clocked the fewest hours worked per year and received the most substantial pay and benefits packages.

In recent years, with the German economy in recession and unemployment stalled in the double digits, it became politically acceptable to argue that a connection exists between a well-paid work force and a lack of economic dynamism.

During those years, IG Metall spokeswoman Dagmar Opacynski said, metalworkers made no gains in real wages. Now that the economy is growing again, she said, it is time to make up for lost time.

Union Victories

An estimated 15,000 metalworkers, right, wave flags and listen to speeches during a demonstration in Frankfurt last week. Below, benefits that IG Metall, an important union now threatening to strike, has won for members over the years:

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1968: Protection against layoffs during periods of business restructuring. 1973: Protection against lay-offs for older employees. 1974: Raise in vacation pay to 50% of worker’s usual salary. 1977: Raise in end-of-year bonus to 20% to 50% of worker’s salary. 1979: Six weeks paid vacation under certain conditions. 1983: Six weeks paid vacation for every worker over 18. 1990: 35-hour work week, to start this year (1995). 1994: Obligation of employers to hire their apprentices when apprenticeship is over.