0.cached.png
By Newsweek Editors
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
German CEO's are famous for cooperating, to the point of cowering, in talks with their mighty unions. Then came the ultimatum from Siemens, which this summer told 4,000 workers at two mobile-phone plants to work longer hours, with no extra pay, or their jobs would go to Hungary. The workers gave in, sparking similar deals at hundreds of other big German companies, including DaimlerChrysler and, most recently, Volkswagen. Next month a new CEO known for his Anglo-American style, Klaus Kleinfeld, takes over at Siemens, and many expect him to be even tougher.
Siemens, a pioneer of German industrialization in the 19th century, has become a bellwether for reform of its labor market in the 21st. One reason: it faces relentless Asian competition, both from big names like Samsung and from upstarts like China's Huawei. They are challenging the core of Siemens's business, equipping and servicing major telecommunications networks. Outgoing CEO Heinrich von Pierer says the company will continue to globalize its work force: "Eighty percent of our revenues come from outside Germany, but 40 percent of our labor is here. That's not a balanced structure." Analysts expect that further cuts at Siemens could affect 35,000 more workers. "Where Siemens goes, so goes Germany," says Dresdner Kleinwort Wasserstein analyst James Stettler. If he's right, German jobs are headed for lower wages, tougher work rules or Hungary.
Read More on News
Submit Correction
View Editorial & AI Guidelines