Trade union responses to cross-border competition in the enlarged EU : evidence from the automotive and construction sectors

Abstract

This dissertation explores under what conditions West and Central-East European trade unions cooperate with each other. It focuses on the d65, which is a critical case for East-West labor transnationalism in view of the importance of cost comparisons among car plants in different countries. The analysis of Polish-German union relations at three car and car component manufacturing companies, Volkswagen’s engine plants, GM and MAN, shows that the German unions sought to establish cooperative links with their Polish counterparts in the areas subject to cross-border comparisons, when no national negotiation channels were available to them and thus the danger of underbidding by the cheaper Polish plants was particularly high. The Poles, in turn, cooperated in exchange for the Germans’ support, only if they expected to benefit more from the Western assistance than from local solutions. Alternatively, they did not hesitate to utilize their comparative advantage of lower wages and inferior working conditions to attract new production. The resulting cooperation was based on reciprocal exchange. The Germans helped the Poles build up their organizations and assisted them during disputes with the local management, whereas the Poles committed themselves not to underbid the Germans during investment distribution rounds. Overall, East-West European labor transnationalism was guided primarily by cost-benefit considerations. The evidence on GM unions’ reactions to the economic crisis of 2008-2009 corroborates this assertion, showing that German employee representatives used enhanced government access to secure the interests of their sites at the cost of other locations, which led to deep divisions in the once unified cross-border GM labor front. The last chapter tests the above arguments against evidence from the construction sector, in which the inflow of CEE workers to West European labor markets constituted a major source of competitive pressure. It shows that the mechanism governing interactions between Polish and German construction unions resembled the one identified in the car industry. Specifically, the scope of cooperation remained narrower due to the German union’s attachment to national solutions and limited gains derived by the two Polish organizations from participating in migrant workers’ assistance schemes.

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