1. LABOUR TRANSNATIONALISM OR LABOUR CONFLICT IN THE ENLARGED EU? Trade Union Responses to the Rise of the Automotive Sector in CEE by Magdalena Bernaciak PhD Candidate Central European University Presentation prepared for 1 st TURI Conference The Future of Trade Union Structures and Strategies Brussels, 14 October 2008

2. Background of the study CEE countries – attractive FDI locations and significant labour exporters European economic integration in view of a social gap => growing competitive pressure in the West-East European setting

3. Research Questions How do Western and CEE trade unions cope with competitive pressure inherent in the process of West- East economic integration? What strategies do they employ to increase/preserve the current employment levels and enhance working conditions? What are the possibilities and limits of transnational union cooperation in the West-CEE context?

4. Unions reaction to the growing competitive pressure – literature stances Cross-border union activism literature Transnationalisation of business activities => intensified cross-border union cooperation; common front vis-à-vis transnational employers (Logue 1980, Bieler and Morton 2001, Greer and Hauptmeier 2008) National union activism literature - Institutional accounts unions embedded in national-level institutions; European-level structures weak (Ebbinhaus and Visser 1997, Streeck 1998) - Interest-based accounts workers pursuing the interests of their own production site; national protective solutions against, not in collaboration with, labor from other countries (Hancké 2000, Pulignano 2006)

5. Case selection automotive industry - high level of transnationalisation - traditionally present in Western Europe, developing in CEE relations between Polish and German unions in three German car-producing MNCs: a) Volkswagen Engine unit (engines and components) b) GM/ Opel (passenger cars) c) MAN Bus unit (commercial vehicles)

6. Automotive industry in Western and CEE Western Europe overcapacities, stagnating demand, falling employment, high production costs => cost reduction measures, concession bargaining, rare investments, two-tier employment systems Central-Eastern Europe steadily growing production and employment levels, shift toward high value added products + investment hunger

7. Hypotheses Western European unions will continue their defensive national stance, safeguarding investments and employment levels via bargaining and concessions Unions from CEE will strive for further investments in their locations, accepting concessions and wage freezes As a result, transnational union cooperation will not develop in the West-East European context

8. VW Engine units mix of national and cross-border strategies advanced transnational coordination German unionists - national level negotiations: wage and working time concessions in exchange for product and employment guarantees - cross-border coordination crucial to control production volumes and avoid sudden cross-border production shifts Polish unionists - strategic use of union power asymmetry: using German union advocacy to obtain product guarantees and strengthen their own position locally - in exchange, accepting cooperation frames created by the Germans

9. GM/ Opel shift from competitive underbidding towards a more cooperative strategy German/ Western unionists - deprived of access channels to company management => vital interest in engaging the Poles into cross-border cooperation Polish unionists - 1st phase: shunning from cooperation, local wage freezes to underbid the Germans to secure an investment - 2nd phase: once investment in the bag, more cooperative stance; using German/Western assistance to obtain wage increases BUT still disagreements – the Poles hesitant to share the pain with the Westerners; did not oppose to increasing capacities in CEE

10. MAN Bus units defensive national measures prevail; sporadic cooperation attempts initiated by the German side German unionists - engaged in local negotiations to prevent relocation and, later on, to safeguard employment for the workers from the relocated units - attempt to build links with workers abroad: too late, unsuccessful Polish unionists - local concessions to facilitate investment - shunning cross-border cooperation as it could prevent further relocation to Poland - local mobilisation for higher wages only after the relocation decision

11. Possibilities and limits of West-East union cooperation 1 Western European unions - defensive strategies well and alive - cross-border cooperation only when defensive national measures not available - BUT in the areas that cannot be safeguarded by national negotiations, WE unions increased propensity to cooperate (as non-coordination costs very high)

12. Possibilities and limits of West-East union cooperation 2 CEE unions - used concessions to safeguard investments – investment hunger - cooperate with the Westerners iff : a) Western unionists are able to assist with the realisation of CEE union goals (investment guarantees, pay rises) b) CEE unionists expect that they will achieve their goals more efficiently through cross-border cooperation than through national strategies

13. Conditions of West-CEE trade union cooperation CEE union: Expectation of Western assistance Yes No Western union: Yes Availability of national solutions No VW engine (employment issues) NO COOPERATION MAN Bus NO COOPERAION - GM (after 2004) -VW engine (product allocation, production shifts) COOPERATION GM (until 2004) NO COOPERATION

14. Conclusions transnational union cooperation will develop only when both sides expect to directly benefit from it => it will NOT develop merely: - in response to aggressive management strategy (Haipeter 2006) - due to the presence of a strong union leader (Greer and Hauptmeier 2008) - as a result of socialisation between unionists (Erne 2006, Gajewska 2008) bad times to come (industry-wide crisis, investment outflows further to the East) as an ultimate test of West-East European union cooperation