Status: 03/21/2022 02:32 a.m
Negotiations for a new collective agreement in the chemical and pharmaceutical industry are starting today in Hanover. 580,000 employees are affected. The timing of the talks could hardly be worse.
The reflex of unions is to look back at collective bargaining and seek industry growth rates where available, and then demand a piece of the pie for the workforce. The figures from last year could hardly provide better arguments: the industry generated 225 billion euros – an increase of almost 18 percent. According to the German Chemical Industry Association (VCI), production rose by a good five percent and producer prices rose by more than nine percent.
Employers tend to look to the future, and mostly with skepticism. Raw materials and energy costs are making things increasingly difficult for companies, they would argue. And here, too, the negotiator will present impressive figures: According to the VCI, 85 percent of the companies state that they cannot or only partially pass on the price increases to their customers. 70 percent are already complaining about serious problems due to the high costs and more than half of the companies expect a decline in sales and production.
Everything has changed since the beginning of the war
If the employee negotiator Ralf Sikorski from the IG BCE calls for “sustainable preservation of purchasing power”, i.e. compensation for inflation plus appreciation of shift work and a concept for mobile work, as the union decided internally on February 22, then he had they have good reasons for doing so – on February 22nd.
On February 24, Russia started its war against Ukraine and now, even in the chemical industry, everything is different. And for this reason, unlike at the beginning of other collective bargaining negotiations, this time there is no specific demand from the union expressed as a percentage.
“A situation of maximum uncertainty”
“We are in a situation of maximum uncertainty. The economic consequences of the Ukraine crisis are already dramatic, especially in terms of raw materials and energy,” says Hans Oberschulte, Head of Human Resources at BASF and chief negotiator on the employers’ side for the first time. “The war in Ukraine and its consequences make a fundamental reassessment of the situation necessary. The world has also changed since February 24 for wage policy.”
Oberschulte alludes to an embargo on gas and oil imports from Russia, which has at least been discussed. The lack of these raw materials would undeniably lead to a significant reduction in production in large areas of the industry and would cause sales to melt away massively. The manager rules out significant wage increases: “A time of maximum uncertainty is definitely not the time for permanent table increases.”
“This unfortunate constellation means that we collective bargaining parties are now doubly responsible,” says Ralf Sikorski from IG BCE for both sides. “We have to find a solution that does justice to both the uncertain economic situation and people’s legitimate desire to increase their purchasing power.” But maybe not this spring.
A degree with uncertain future prospects?
At the moment it is completely open whether the political situation – and thus the prerequisite for calculable economic development – will quickly normalize again or whether we are only at the beginning of an era in which the economy will become secondary for people. Against this background, the union asked last week whether collective bargaining would not be interrupted quickly and only continued when the global political situation eased: “When in doubt, we are also prepared to build a bridge over the valley of uncertainty,” says Ralf Sikorski.
In any case, the employer side seems to be open to this idea. Hans Oberschulte said: “Both sides must first weigh up the pros and cons of such a solution internally. There is also the question of what this bridge could look like in concrete terms. In the current extraordinary situation, we are not ruling out any options in advance.”
No compensation for inflation at the expense of job stability
“Basically, they would have to negotiate wage cuts,” says Professor Hajo Weber from the Institute for Modernization (IMO). He deals with development processes in society and the labor market. “In Japan, in such a situation, wage increases would not be discussed because they could ultimately lead to layoffs. Unlike here, the workforce in Japan is considered one big family and in times of crisis everyone, up to and including top managers, give up part of their work salary to save the whole thing.”
Weber sees the industry in a major upheaval brought about by the energy revolution and changes in the automotive industry, on which many chemical companies depend. This upheaval now requires investments, but against the background of rising energy and raw material prices there is less and less room for maneuver.
Postponing wage issues could make sense
“It’s an extremely disgusting situation for the unions,” Weber continued. Because even if everything is getting more expensive at the moment, it is not the time for inflation compensation or even more. And for him it only has something to do with the war in Ukraine. But more with the current requirements of not losing touch with the switch to new energy sources.
The “bridge over the valley of uncertainty”, as suggested by IG BCE, could be the smartest solution. Postponing wage issues until the situation becomes clearer and now only talking about pressing side issues. For example, about flexible workplace design, better allowances for shift workers or a youth initiative against the shortage of skilled workers.