The Lesson of Lufthansa: Labor Union Chaos Is Germany's Future
Recent strikes in Germany prove what many experts have long been warning: Labor unions in the country are fragmenting. Mini-organizations representing specialized employees are making strikes more frequent and more complex than ever.
Ver.di wants more. But do workers want Ver.di?
But that's not all. Some Lufthansa ground workers are unhappy with the deal recently negotiated by the giant service union Ver.di and are threatening to vote down the compromise deal hammered out late last week. Indeed, airplane mechanics in Munich are so disgusted with the agreement that they are weighing a split from Ver.di. Their mini-organization, known as Vereinigung Boden and made up of some 1,000 workers, was against Ver.di's Lufthansa strategy from the very beginning. A further group known as UFO, which represents Lufthansa's cabin personnel, has likewise voiced opposition to the Ver.di deal. The group's own labor agreement expires at the end of the year and UFO plans to ignore the terms negotiated by Ver.di and fight for a 15 percent pay raise of their own.
In short, Lufthansa is facing a labor situation that is nothing less than chaotic. But it is also one that managers of other large companies would be wise to study, says German labor union expert Horst-Udo Niedenhoff. Lufthansa's current troubles, he says, provide an insight into the future of the German labor market. Niedenhoff, who is a labor consultant for large German companies, sees a future in which highly specialized unions wield increasing power.
Indeed, in just a few years time, Niedenhoff says, a number of companies could find themselves in a situation similar to Lufthansa's. Within Germany's airline, a number of unions, including Ver.di, VC, UFO, KabineKlar and Vereinigung Boden are all fighting for members and influence -- and are becoming increasingly aggressive. Many experts see the just-ended strike as little more than a show, staged in order to prove Ver.di's effectiveness to its own and potential members.
Such a splintering of labor representation can be seen in other branches as well, with mini-organizations discovering just how much power they have. In 2005 it was the doctors' union Marburger Bund that split off from Ver.di and then managed to leverage impressive salary increases by going out on strike. Late last year, a small union representing German train drivers froze up rail travel across Germany as it sought higher wages for its members.
In the banking sector, Ver.di is also in a battle for members and influence -- competing against two other unions. Niedenhoff says there are more such skirmishes to come. "It is not difficult to imagine similar scenarios in the IT branch, or among engineers, secretaries or nurses," he says. "The era of large unions is approaching its end."
Ironically, it may be Ver.di itself that is fuelling the growth of power among mini-unions. In 2001, the gigantic organization was born out of five individual unions, becoming one of the largest service unions in the world with 2.3 million members. Since then, though, some 600,000 members have left the organization. Such shrinkage is hardly surprising, says labor law expert Ulrich Zachert. He says Ver.di has always been something of an artificial construct and remains unable to effectively represent the myriad different interests of its members.
The question as to whether Ver.di can solve this problem is a core issue when it comes to the future of Germany's labor union landscape. For Niedenhoff, though, the future is clear. "Ver.di can never work," he says. "In this era of individualization, it was a huge mistake to create an organization of that size."
Fallout from that mistake has made the lives of ordinary Germans difficult at times. In their efforts to increase their influence in Germany's increasingly fragmented labor market, unions have recently been more aggressive. In 2007, Germany lost more workdays to walkouts than in any other year in a decade and a half. Numerous stoppages hit German rail, public service workers walked out, Berlin public transportation had to severely limit service due to striking employees and since July, air travel has come under increasing pressure.
Employers have no choice but to adapt. "It has become much more difficult to plan for labor battles," says Niedenhoff. Plus, he says, unions seem to be trying to outdo each other in the demands they are making. And it's not always in the interest of the workers they are representing, observers say. "If each group of employees fights only for themselves, solidarity plays less of a role and the socially weak are left behind," says Zachert.
Pilots, for example, can easily call attention to their demands. Even when just 1,000 pilots walk out, vast cancellations are the result. Retail workers, on the other hand, have little leverage. Recently, German retail workers went out on strike for some 15 months without the public taking much notice. The stores simply replaced the strikers with scabs. In the end, the union managed to push through a meagre 3 percent pay raise.
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