Globalisation and Class Struggle in Germany (page 2 of 5)
By Jerry Harris

This high level of global integration is another indicator that TNCs are no longer based in nation-centric economies. From 1987 to 2001 there was a total of 59,273 cross-border M&A worth over four and a half trillion dollars. The following year German TNCs were involved in 24 of 81 cross-border M&A worth $1 billion or more revealing the depth of their global activity.

FDI is another key indicator of globalisation as TNCs pour capital across borders linking national production and investments. In the chart below we see that even after the world economic downturn of 2001 transnational networks continue to grow. Germany also had the greatest amount of value added by foreign affiliates at 16.4 percent of its GDP in 1999 compared to 4.1 percent for France and the UK.

The above charts show the power and position of transnational capital in German society, but the following review of some of the largest individual TNCs will help deepen our investigation. Siemens is the largest electrical engineering and electronics company in the world and the largest manufacturer by sales outside the auto industry. Spanning 190 countries with 600 manufacturing sites it has a global workforce of 420,000 and a transnationality index of 56.8. It is still Germany’s largest employer with 167,000 workers even after 86,000 lay-offs over the past 12 years. In contrast, the company’s global workforce grew by 56% over the same period. Siemens is among the top 100 employers in the US with 70,000 workers spread throughout all 50 states. Its next largest concentration is China where the corporations employees 21,000.8

BASF is the world’s largest chemical corporation and describes itself as a “transnational company focused primarily on Europe, the USA, Latin America and the Far East.” Of its 14 most important sites only two are in Germany with three in the US.9 Recently its biggest move has been in Asia where it is the number one chemical investor in China. Germany’s other great chemical corporation, Bayer, defines itself in similar terms writing ‘the cornerstone of our business activities are in Europe, N. America and the Far East.’ Bayer owns 350 companies operating on all continents with its combined European sales representing just 40% of its totals.10

The German car industry has a particularly strong national identity but its production is thoroughly transnationalized. DamilerChrysler is one of the best examples of a merged transnational corporation. It describes itself as a ‘truly global company’ with a ‘global workforce and a global shareholder base.’ It operates manufacturing sites in 17 countries and sells its stocks in Frankfort, New York and Tokyo.11 Although the corporation has met problems in joints ventures with Mitsubishi and Hyundai, its trucking operations with China is planned as an export base to Russia, India, and South Korea. DamilerChrysler’s truck business is the world’s largest and most globally integrated with a single range of major parts used throughout Europe, Japan, the US and Brazil.12

Volkswagen (VW) has one foot planted in global production and the other in national soil. The state of Lower Saxony is still Volkswagen’s largest shareholder and just over half of its workforce is in Germany. With state and union representatives joining together on its board VW has found it difficult to shed workers and cut costs. Still VW has 19 global production sites, over 80% of its sales are in foreign countries and it ranks 15th in the world in foreign held assets.13 VW has the largest share of China’s rapidly growing auto market and has also moved into Eastern Europe producing cars in the Czech Republic, Hungary and Poland. Recently it become Slovakia’s largest employer where wages are one-sixth of those in Germany. VW has been an active player in the M&A market taking over Bentley, Bugatti, Seat, Skoda and Audi.14

Bertelsmann, another transnational with a strong German identity, recently pushed through a controversial 50-50 merger with Sony Music. The expanded company will control over 22 percent of world music sales and cut about 25% of their workforce. Bertelsmann’s broadcasting arm RTL also has a transnational focus and is more dependent on growth in Spain, France and the UK than their declining market share in Germany. Even their traditional German media rival, ProSieben, is now owned by an US investor group.

Similar transnational accumulation patterns are evident in Europe’s largest telecommunications operator, Deutsche Telekom, whose main growth is in the US while its German market struggles with feeble returns. Underlining their transnational investment strategy Deutsche Telekom paid $2.5 billion for Cingular Wireless taking over its mobile networks in California and Nevada. They also own between 49 to 60 percent of the telecommunication networks in Hungary, Slovakia, Croatia, Poland and the Czech Republic. Formerly a state monopoly, the German government is expected to sell its remaining 43 percent share of the company.

In information technology Germany’s SAP is Europe’s biggest software maker, but Germany only accounts for about 10 percent of its revenues with 45 percent coming from the Americas and 19% from Asia/Pacific.15 Inside Germany the information technology industry is concentrated between Dresden and Freiberg in an area dubbed ‘Silicon Saxony.’ A center of the Soviet bloc’s microelectronics industry, today the area still retains about 760 IT companies and 11,000 employees. But Dresden is evolving into a transnational center of production particularly with the projected investment of $4.8 billion by the US chipmaker Advanced Micro Devices (AMD). Government subsides have helped the region but aren’t limited to German companies, AMD received $745 million in local, regional and federal help. AMD has also entered into a joint venture that includes DuPont and Infineon, a memory chipmaker spun-off from Siemens.16 Infineon has not limited its efforts to Germany, but is also investing a billion dollars in a new fabricating plant in China with additional expansion into Eastern Europe.

Another indication of the transnationalization of German corporations is in the corporate boardroom where foreign nationals are taking leadership positions. This includes Deutsche Bank chief executive Josef Ackermann, born in Switzerland; the new chief executive of MAN, Jakan Samuelsson, born in Sweden; Lufthansan, led by Austrian Wolfgang Mayrhuber; and RWE, headed by Harry Roels from the Netherlands. 17

The TCC and Class Conflict

Operating through their dominant position in the German economy transnational capitalists have been actively reshaping German labor relations with frontal assaults on wages and hours. These attacks reflect a transnational political and social view that no longer sees a national accord between capital and labor as a necessary arrangement or competitive advantage since globally networked production undercuts previously established social contracts by its reorganization of labor. So when Bosch, the German car components company, forced French workers to abandon the 35 hour week with no increase in pay similar demands quickly jumped borders to Germany. TNCs including Bosch, Siemens, MAN, Linde, Opel (owned by GM), Mercedes and DamilerChrysler all called for extended working hours often coupled with threats to go abroad.

Siemens was the first to demand an extended workweek at two of their plants pushing hours from 35 to 40 with no increase in pay. As outgoing CEO Heinrich von Pierer noted, ‘I am interested in the social well being of Germany. But we have to improve our costs position in Germany because at the moment our costs are higher than in many other places where we operate. If we’re seeing 4 per cent annual growth rates in economies outside Germany and only 1.5 per cent in Germany, then its obvious we’ll see greater employment growth in the Siemens workforce abroad than at home.’18 Attempting to defend their contract IG Metal mobilized 25,000 union members in street protests. In response Siemens threaten to move half their jobs to Hungary where operating costs were 30% lower and successfully forced the union to accept longer hours.

Dieter Hundt, head of the German employers association BDA declared the contract would ‘help create a new collective bargaining culture’ for Germany.19 And Rudolf Rupprecht, chief executive of MAN, the engineering and truck conglomerate stated, ‘If the 40-hour week is going to re-emerge slowly, we would rather be in the front rather running behind breathing in the exhaust fumes of others. The trend towards the 40-hour week is unstoppable and that sometimes means more work for the same money.’20 More >>