- DaimlerChrysler workers agreed to implement a 40-hour week for some jobs and cut paid break time to secure 6,000 jobs in Germany in a deal that will save $600 million a year.
- Thomas Cook workers agreed to raise their weekly working hours to 40 from 38.5 for one year. The employees also agreed to delay a pay rise by 18 months.
- Workers at a Robert Bosch car parts factory (in France) voted to lengthen their working hours to save jobs, making them the first employees to vote to scrap France's 35-hour week.
This reminds me of the time when Japan was trying to recover from the collapse of the bubble economy. As labor became increasingly expensive and major Japanese corporations evaluated if they should stay in Japan or move to China to save their companies from extinction, they often tried to come up with employee-friendly solutions (e.g. pay cuts, elimination of bonus and expense accounts, and reduction in company expenses on unnecessary items like buying Van Gogh paintings to decorate reception areas and conference rooms).
While these are laudable measures and will definitely alleviate the pain the employees would feel otherwise, if we look at what eventually happened in Japan, it is clear that a more long-term solution may be needed. Japanese companies have since then relocated thousands of manufacturing locations to remote parts of China, cut back on new hires, bonuses are smaller and given less often to fewer employees, and not many new investments are being made in Japan.
I would expect something similar to happen in France and Germany and other EU nations as well. While offshoring has become a hot-button issue in America (and now in Europe with reports of customer service jobs being shipped to French-speaking African countries), Japan has already dealt with this issue for more than a decade now. While painful, the Japanese have handled it admirably. There was no government mandate to keep jobs in Japan and Japanese people have developed a whole new attitude towards life. They have a lot more fun, work less, and no longer think of a corporate job as the only thing they will do before retirement. No wonder, there are many more smiling faces whenever I visit Japan.
Suggested link: Impact of offshoring on American economy