Steel strike threatens West German labor harmony

For Eugen Loderer it is a dismantling of labor's share in directing company affairs that is at stake. For Egon Overbeck it is management's right to manage -- and the financial survival of Mannesmann steel and pipe divisions -- that is at stake.

Mr. Loderer is chairman of IG-Metall, the largest trade union in the world. Dr. Overbeck is board chairman of the Mannesmann engineering and pipe concern, the 11th-largest company in West Germany.

The breakdown of their third round of negotiations on "codetermination" Aug. 11 threatens a potential steel strike, an end to West Germany's vaunted labor harmony, and a hot political season in the run-up to the October general election.

The confrontation arose when Mannesmann decided to merge its steel division into its pipe division. With the coming of cheaper Japanese and South Korean steel onto the market in the past two decades and the overcapacity of West European foundries, Mannesmann diversified away from general steel production and now turns out only the special steel for its pipe division. The company therefore sees the planned merger as a necessary rationalization to save 50 million deutschmarks ($85 million) a year and keep its pipe division competitive.

IG-Metal views things differently, for one reason -- "codetermination." Under this system West German workers have participated in company supervisory boards since 1951 in the coal, iron, and steel industries and since 1976 in other firms with more than 2,000 employees.

Under the planned restructurin, Mannesmann pipes would still be legally required to continue the codetermination boards where representation is split evenly between labor and management. There would be one major difference, however: the chairman.

Under the early coal and steel laws inspired by the postwar occupying powers' wish to block German cartels from regaining the power they had under the Nazis, any tie vote on the boards is decided by the "neutral" chairman agreed on jointly by workers and shareholders. Under the general codetermination laws passed by the Social Democratic-Liberal coalition in the mid-'70s, however, the tie-breaking vote goes to a chairman who represents shareholders. And one member of the labor team must in any case come from white-collar workers, whose views sometimes lean more toward managers than blue-collar workers.

The IG-Metall leaders -- under some pressure from more militant younger activists -- are therefore now intent on blocking a precedent that might enable other coal and steel companies to reorganize and thus slip into the form of codetermination less favorable to labor. Already "spontaneous" strikes of one or two hours by more than 30,000 steel workers have registered blue-collar protest over the intended Mannesmann change. And Loderer has indicated that an organized striker might follow IG-Metall's evaluation of the situation in the next days and weeks.

The nationwide Confederation of Trade Unions has pledged its support for the IG- Metall fight. And various employers' associations have pledged their support for Mannesmann.

Mannesmann will decide on final implementation of its plan -- or possibly on another attempt to resurrect negotiations with the union -- Sept. 15.

Following the Aug. 11 breakdown in negotiations, some Social Democrats have called for a special session of the Bundestag to pass a special "Lex Mannesmann" forbidding the planned merger. As thins stand now the government would not be able to get a majority on such legislation, however; the main effect would be to set the Social Democrats and the Free Democrats in the coalition to squabbling with each other.

The Free Democrats support codetermination in general, but their classic liberal favoring of as free a market economy as possible makes them unwilling to go beyond assuring some labor participation in company decisions to tying the hands of management.

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