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Continuing Challenge of Transnational Companies and Trade Union Strategies

Robert Steiert Industrial Policy Team. Continuing Challenge of Transnational Companies and Trade Union Strategies. Proposals for strengthened IMF-activities and necessary re-structuring Presented to an FES - workshop Turino, August 23rd, 2001. Facts on Transnational Companies:

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Continuing Challenge of Transnational Companies and Trade Union Strategies

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  1. Robert Steiert Industrial Policy Team Continuing Challenge of TransnationalCompanies and Trade Union Strategies Proposals for strengthened IMF-activities and necessary re-structuring Presented to an FES - workshop Turino, August 23rd, 2001

  2. Facts on Transnational Companies: • International production by transnational companies .. numbers up to some 63,000 parent firms with around 690,000 foreign affiliates ... • The world‘s top 100 TNCs are the principal drivers of international production • The foreign affiliates of the top 100 TNCs employ over 6 million people • These companies are mainly concentrated in electronics and electrical equipment, automobiles, petroleum, chemicals and pharmaceuticals • TNC‘s are constantly increasing their power by Mergers & Acquisitions (M&A), both national as international • The total number of all M&A‘s worldwide (cross-border and domestic) have grown at 42 per cent annually between 1980 and 1999 • Driven by this wave of M&A‘s the global outflow of Foreign Direct Investment (FDI) reached $ 800 billion in 1999. The figure for 2000 has probably surpassed the one-trillion-dollar mark. United Nations: World Investment Report 2000

  3. Challenge for IMF: • TNC‘s become bigger and bigger; Mega Mergers create huge companies • 40 out of the top 100 TNC‘s are Steel / Electronics / Aerospace / Automobile and supplier companies for the automobile industry • 60 out of the top 200 TNC‘s belong to these industries • New type of TNC‘s: Contract Manufacturers (CMS) which produce hardware for well-known companies and meanwhile count several ten thousand employees all over the world and bring a turnover of up to 10 billion $ i.e. Solectron, SCI, Flextronics etc.  Decreasing union density rate also in industrialised countries • Low unionisation in the „New Economy“ and the CMS • Union competition on national level  Overlapping affiliation in different ITS‘s

  4. IMF and Transnational Corporations „Recognising the need to counter the power of transnationals, the IMF established World Councils. The first set-up in the automotive industry back in the 1960s and now there are councils bringing together workers from 24 corporations.“ Fact: not even the 40 metal companies out of the top 100 TNC‘s are covered by World Councils. Draft IMF Action Program 2002 - 2005

  5. Trade Union Instruments in TNC‘s • World Councils / World Conferences  World Company / World Works‘ Councils  Regional Company Councils  Steering Committees  Task Forces

  6. World Councils / World Conferences • - • Only small number of meetings possible per year • Long time period between meetings • Unclear number of participants • High fluctuation of participants • Huge input for preparation • Cost intensive for IMF and unions • Reduced bindingness of results • Reduced efficiency • Low possibility of reacting to actual developments in the company • + • Broad integration of unions and plant based workers‘ reps. • Broad basis for information exchange • Possibility of involvement of many representatives • Higher acceptance of decisions and recommendations • High number of participants can guarantee „representative“ composition of the council

  7. Expenses of company world conferences / councils: Company Year Expenses / US $ * Volvo Ericsson Toyota Matsushita (regional) GM – Action Group General Electric (GE) Action Group Ford (Latin America) Magna Philips ABB 36,000 20,000 39,000 18,000 18,000 54,500 9,500 12,500 47,000 23,500 1998 1999 2000 2001 In addition there have been small working groups / action groups which cost between $ 1,000 and $ 5,000 depending on translation and composition (Solidarity Fund) These figures only cover the costs for the IMF – headquarters. Expenses taken by the affiliates (i.e. travel expenses for delegates etc.) and/or by companies are not contained. * Exchange rate: 1 $ = 1,72 CHF

  8. World Company Councils / World Works‘ Councils +  Institutionalised body based on agreement with company Broad integration of plant based / shop floor workers‘ representatives Broad basis for information exchange Top management gives information Top management discusses with participants / members of council Company takes over most of the costs - Composition concentrates on company / plant based reps. Involvement of union officers depends on acceptance of company, shop floor representatives / agreement Exclusive composition of shop floor reps. Includes danger that „company interests“ are dominating Danger of undermining trade union structures Delegation system (company based representatives as well as trade union officers) demands network for collecting information on national / local level and for reporting back Necessity to agree on delegate(s) Need for system and regulation for IMF - coordinators Such bodies exist already on the basis of a voluntary agreement in Volkswagen and SKF

  9. Regional company councils • - • Danger of the development of a regional-nationalistic view and policy Unclear number of participants • High fluctuation of participants • Lack of information on company-wide developments & situation possible • + • Broad integration of unions and plant based workers‘ reps. • Higher number of participants and meetings possible • Coordination on a level of largely common interests and conditions possible • Quicker reaction on actual develop- ments possible • Less cost intensive than world meetings / conferences • Integration of union(s) from „home-base“ of TNC can limit isolation / lack of central information Regionalised company councils exist in Europe created by agreements and since 1996 by an EU-directive on European Works‘ Councils. Only in the Metal Industry there are already more than 200 EWC‘s.

  10. Steering Committee • -  Continuity of persons necessary • Delegates have to be decided on national and / or regional basis • Question of mandate • Without support from unions / plants he represents, system will fail • Network for collecting information and reporting back is necessary • Delegate has to be communicative • Problems of representiveness: union officer / plant representative company divisions • + • Relatively small number of members • Enables increased number of meetings • Less cost intensive • Possibility of intensive discussions • Possibility of developping union strategies vis-à-vis the TNC • Intensive preparation of trade union activities possible • Possibility of quick reactions on developments on short notice

  11. IMF Philips - World Conference / Amsterdam, February 6 - 9, 2001 • Proposal for the composition of a Steering Committee: •  1 representative of each of the following European regions: •  Netherlands •  Germany / Austria / Switzerland •  Belgium / France •  United Kingdom / Spain / Portugal / Italy •  Middle / Eastern Europe •  Chairman of the EWC Philips (if he is union member) •  1 representative of the EMF (EMF-secretariat resp. EWC-Coordinator) •  1 representative for NAFTA (USA / Canada / Mexico) •  1 representative for Mercosur (Brasil / Argentina) •  1 representative East Asia (Japan / Taiwan / South-Korea / Philippines) • 1 representative South-East-Asia (Malaysia / Indonesia / Thailand / India / Pakistan / Singapore / Australia)  1 representative IMF - secretariat

  12. IMF World Conference for ABB / Mannheim, March 28 - 29, 2001 • Proposal for the composition of a Steering Committee: • 4 representatives for Europe (nomination via the EWC ABB) in coordination with the respective trade unions) •  1 representative for NAFTA (USA, Canada, Mexico) •  1 representative for Latin America •  1 representative for South Africa) •  1 representative for Asia •  3 representatives of the EMF (including the EWC-Coordinator)  1 representative of the IMF - secretariat

  13. Task Force • -  Continuity of persons necessary • Delegates have to be decided on national and / or regional basis • Question of mandate • Without support from unions / plants he represents, system will fail • Network for collecting information and reporting back is necessary • Delegate has to be communicative • Problems of representiveness: union officer / plant representative company divisions • + • Small number of members (Normally up to 7 maximum) • Enables increased number of meetings, also on short term • Less cost intensive, especially when languages can kept to one, max. two • Possibility of intensive discussions • Possibility of developping union strategies vis-à-vis the TNC • Intensive preparation of trade union activities possible • Possibility of quick reactions on developments on short notice

  14. IMF Philips - World Conference / Amsterdam, February 6 - 9, 2001 Proposal for the composition of a Task Force:  1 representative of the Netherlands  Chairman of the EWC Philips (if he is union member)  1 representative of the EMF (EMF-secretariat or EWC-Coordinator)  1 representative for America)  1 representative for Asia  1 representative of the IMF - secretariat

  15. IMF World Conference for ABB / Mannheim, March 28 - 29, 2001 • Proposal for the composition of a Task Force: • 2 representatives from Europe (nominated via the EWC ABB in coordination with the respective trade unions) •  1 representative for America •  1 representative for Asia / South Africa •  1 representatives of the EMF (secretariat or EWC-coordinator)  1 representative of the IMF - secretariat

  16. Conclusions Current concept of world conferences seems not to be able to create an effective and flexible structure for trade union policy Necessary are quick, updated and direct activities based on agreed strategies Activities have to be broken down to smaller committees (World Councils, Steering Committees and Task Forces) These committees will be composed by delegates not representing a special union but unions from a certain region Trade unions have to agree on common delegates and therefore have to limit, better eliminate, national competition Networks have to be built which supports these delegates and enable broad and rapid distribution of information but also provide information for the unions in the regions and its members in the plants Regional IMF-offices have to play a role in this structure by supporting process of decision finding for delegate(s) and collecting and providing information Education policy of national unions as well as of the IMF have to be restructured to support the building up of these structures and to support the cooperation of unions within TNC‘s

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