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Strike Fever Hits Europe


International Business

STRIKE FEVER HITS EUROPE

It was a scene France hadn't witnessed for years: thousands of angry workers burning tires, battling police, and shutting down their company for a week. In the end, the bitter walkout at Air France in late October not only forced the government to shoot down a planned layoff of 4,000 workers at the state-owned carrier but also led to the ouster of the airline's chairman.

The Air France strike may have done even more than that, though. It could mark a troubling and costly turning point for Europe. All over the Continent, workers who have merely grumbled about snowballing layoffs and wage cuts during Europe's worst recession since World War II suddenly are becoming militant (table). Labor's triumph at Air France, along with similar victories in Italy and elsewhere, are causing union leaders to flex new muscles. "You're going to see a lot more action after Air France," promises Gerard Muteau, an official of France's biggest union, the Confederation Generale du Travail. "There's such discontent in Europe, it takes very little to set it off."

Europe's social fabric is starting to fray on several fronts. The European Community's economic union, already in disarray as EC leaders gather for a special Oct. 29 summit, may come under new pressure. Many workers blame borderless competition for the Continent's soaring unemployment, now 11.5%, and for government efforts to shrink social benefits and bring budgets in line with community dictates. "People can't accept that European union means regression," says Antonio Gutierrez, head of Spanish labor group Workers Commissions.

Labor unhappiness could even threaten governments. Both Spain and Belgium are negotiating social pacts with unions to restrain wages and lessen layoff constraints that executives say discourage hiring. But talks collapsed on Oct. 24 in Brussels and are going nowhere in Madrid, and new elections could follow if talks fail altogether.

ON A BINGE. As for industry, labor's new activism threatens the forced march toward global competitiveness. European companies are on a belated restructuring binge, trying to cut costs to Japanese and American levels. State-owned companies, sheltered from competition but now facing privatization, are particularly vulnerable and are trying to slim down fast. These companies are labor's chief targets so far, partly because vote-conscious politicians often are soft touches.

So French unions are calling for a massive Paris march on Nov. 18 by employees at dozens of French companies. Among them are workers at auto maker Renault, who aim to kill a merger with Sweden's Volvo that would cost jobs. Also joining will be workers from Groupe Bull, SNECMA, Aerospatiale, and other state-owned companies, throwing those enterprises' restructuring plans into doubt as well.

It's the same across Europe. In Italy, strikes are erupting daily and seem bound to worsen. Rome cab drivers stayed home to protest a new tax, while rail workers barricaded Turin's train station, snarling service across northern Italy. But that's nothing compared with the one-day general strike planned for Oct. 28, when some 14 million were due to walk off the job to protest government austerity. Militancy already is paying off. Rome quickly backtracked on plans to lay off 500 workers at a profitless chemical plant in Calabria after violent strikes erupted there in September.

Germany saw wildcat walkouts in mid-October by Ruhr steelworkers, who blocked autobahns to protest their industry's planned restructuring. Labor leaders are vowing action over recent moves by German business to cancel wage contracts unilaterally. And even in Britain, where strikes have been rare since Thatcher-era laws limited them, unions representing 300,000 civil servants plan a one-day walkout on Nov. 5 to protest privatization.

4-DAY WEEK? So far, no one expects a return to the chaos of the 1970s, when strikes were as common as coffee breaks in Europe's factories. Since then, most countries have enjoyed unusual labor tranquility. Social pacts in Germany and elsewhere have helped keep peace. In France, 5 million workdays were lost to strikes in 1976, but only 490,500 last year. One reason: Rising living standards and a centrist trend sapped European unions' strength.

Emboldened now, unions may push next to block planned privatizations across Europe, some $150 billion worth. Meanwhile, governments and companies are struggling to find new ways to keep jobs and ease the pressure. One idea whose time may be coming is a four-day workweek--at lower pay--in lieu of layoffs. Volkswagen plans to introduce this at some of its German plants. France's Prime Minister Edouard Balladur also is weighing the idea as national policy. But many French companies oppose it, fearing higher costs.

With the end of Europe's recession nowhere in sight, however, such plans seem unlikely to defuse workers' growing activism. "It's an absolutely explosive situation now," warns Angelo Airoldi, an official of Italy's biggest union confederation, CGIL. For those having to skirt this tinderbox, France's Prime Minister hasn't made life any easier.Stewart Toy in Paris, with John Rossant in Rome, Patrick B. Oster in Brussels, and bureau reports


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