Doubts rise for Berlin's 'no-firing' agreement
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BERLIN: The German government ended its economic summit meeting saying that employers had agreed to a "voluntary no-firing" policy as part of efforts to pull out the country out of recession.
But some German companies are already trimming their work forces, and business groups say they are waiting to see what the government is going to do to help them keep that promise in 2009.
"It is difficult to agree to a voluntary no-firing policy when you are not entirely sure what the government intends to do over the coming weeks and months," said Thomas Hüne of the Federation of German Industry.
Chancellor Angela Merkel and Finance Minister Peer Steinbrück called Sunday's meeting economists, employers, trade unionists and politicians to come up with a "concerted approach" to deal with the economic crisis.
By including as many vested interest groups as possible in the consultations, Merkel hoped to forge an informal pact between trade unions and employers with the aim of preventing job losses. The unions would accept lower raises in return for the employers agreeing to preserve jobs.
Today in Business with Reuters
"Big companies will apply a voluntary no-firing policy," and set up training programs as an alternative, Steinbrück, a Social Democrat, said Sunday in Berlin, Bloomberg News reported.
No immediate measures to offset the effects of the global financial crisis were agreed to at the meeting.
Merkel, a conservative, said she wanted to assess the different economic forecasts and see what economic policies Barack Obama would adopt once he is inaugurated as U.S. president on Jan. 20. In the meantime, she will meet next month with Germany's 30 biggest listed companies, said Ulrich Wilhelm, a government spokesman. Steinbrück will establish groups to consider each sector, and there will be another meeting on Jan. 5.
One idea that emerged from the meeting Sunday was to prolong state payments for those in short-term work and training programs. Such a policy might persuade companies to hold off on layoffs and opt for shorter working hours.
The first time such a "concerted approach" involving business and labor was tried was in the late 1960s, during Germany's first grand coalition of conservatives and Social Democrats. Then, the economy was facing a severe crisis and the conservative chancellor at the time, Kurt Kiesinger, believed that the only way a solution could be found was by getting everyone on board.
But Hüne noted that the current global financial crisis was far broader. In addition, the German economy is so dependent on global markets that companies can no longer give a blanket commitment to saving jobs as they could in the 1960s, when they were only beginning to tap export markets.
With the economy having fallen into recession this year, German companies have already responded. BASF, the global chemical company, said last month that it was temporarily shutting about 80 factories and reducing production at 100 plants throughout the world. Jürgen Hambrecht, the BASF chairman, said that about 20,000 jobs worldwide would be affected, and that there would be an emphasis on creating flexible work-time arrangements.
The auto industry is in no position to give Merkel any promises either, because of the sharp downturn in the U.S market. Already, Opel and Daimler-Benz are introducing shorter working hours, with layoffs expected.
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