EWC chair of GM Europe explains his methods

The European works council of GM Europe has been devoting efforts for some time for state support. Offers were also requested from members. Now that General Motors has found sudden wealth, instead of being destitute, there are a lot of questions that EWC president Klaus Franz has to answer from journalists.

During recent years, GM Europe (Opel, Vauxhall) has announced a company closure on top of mass redundancies. As the president of the employee representatives for the whole of Europe, Klaus Franz had an important part in not allowing these factors to play against each other. The EWC could not prevent GM from rejecting a rescue plan by the Canadians and Russians nor the decision to close the Antwerp operation. On the other hand, this Spring, as the president of the German central works council, Franz did reach an agreement whereby the influence of the employee participation body in Germany (and therefore also the position of the EWC) would be expanded, at the cost of the authority from the American head office. For this, the employees were requested to take a voluntary pay cut of 265 million euro. Rarely had an agreement lasted such a short time. GM was once again making profit, so it seemed. Firstly a bankruptcy was also needed (creditors made a loss of 78 billion dollars) plus 50 million dollars from the American government. Meanwhile this profitability has again lasted for three consecutive quarters and the company no longer sets great store by support from European governments, especially not if there are conditions attached. On top of that, on 18 November it made its comeback to the stock exchange and made such a spectacularly large amount of money from the market that it was already able to repay the 12 billion aid. The American government’s interest in the country was suddenly reined back from 61 to around 40 percent. You would hardly think that the European activities of the group were still making a loss. EWC president Klaus Franz does not see any reasons to be relieved, he told the German newspaper Focus. It asked him how when looking back whether he sees that employee representatives backed requests for government aid with so much conviction whilst that support did not seem to be needed. Franz revealed in the interview that whilst he was still negotiating the corporate governance in Europe, he flew to the US to say that the group management should take away their begging bowl. This only led to delays in the necessary rebuilding, he now says. He continued supporting the requests from GM Europe for a time because there was no money coming from the US for projects which should modernize the European arm. When the parent group published its first quarterly profit, he thought that it could no longer combine making profit and requesting aid. But according to the EWC chair, the stock-market flotation came too soon. Because the restructuring is not yet completed in Europe and there will only be a dramatic rise on the pressure on employees in Europe. Also because there have not been any changes to the bureaucracy and centralisation from Detroit. Employees feel that this centralisation is to blame for the wrong cars leaving the production line. In the same interview, Franz warned that in the future more clashes of interests between employees in Europe will come to light. Some factories work with extra shifts, whilst others have surplus capacity, depending on the models that they produce. On another occasion, during the opening of the Automobilwoche in Berlin, Franz said that in recent times we have witnessed a `renaissance in employee participation`. He believes that without that participation, Opel would no longer exist. The employee representatives have demonstrated that they are often better crisis managers that the managers themselves. In any case, they have identified more strongly with the company. 'In the long term social dialogue is superior to thinking about shareholder value`.