Amazon at odds with Germany over strong union tradition (Seattle Times)

By | Published Aug 23, 2014 | The Seattle Times
Amazon at odds with Germany over strong union tradition (Seattle Times)

There’s a labor battle festering on the outskirts of this quaint city, dotted with old stone churches and houses that date back to the 15th century.

Every few months for the past year, 400 or more workers have walked off their jobs at two massive warehouses that sit near the geographic center of Germany. On a sunny June day, as the protesting workers grill bratwurst and listen to a guitarist playing union songs, the rants aren’t the hot-button issues that often fuel strikes in the United States.

Sure, the workers here want better pay and job security for zipping off boxes of books, shirts, razors and more to customers. But often, the first complaint these Amazon strikers raise is simply that the company doesn’t respect their rights as Germans to form a union and engage in collective bargaining.

They want Amazon to come to the table because, they say, that’s what companies in Germany do.

“It is the culture in Europe,” said Martin Schierl, who works in customer returns behind the secure turnstiles at the warehouse on the other side of the parking lot. “My father was in the union, too.”

Even though they don’t have a contract, roughly 2,000 of the 9,000 full-time Amazon warehouse workers in Germany have joined Ver.di, the country’s second-largest union. Since early 2013, they have walked off the job in occasional strikes in four cities — Bad Hersfeld, Leipzig, Graben and Rheinberg.

Amazon says the strikes haven’t affected shipping times. And they haven’t had any discernible impact on the Seattle company’s staunchly anti-union views.

Amazon steadfastly opposes negotiating with Ver.di, and the company has opened new warehouses in neighboring Eastern European countries, where jobs are more scarce and unions are less of a threat.

But where the strikes have had impact is on the impression Amazon leaves with Germans. This isn’t merely a battle about wringing a few more dollars from Amazon’s pocket. It’s a cultural battle in which a union-averse American tech giant is trying to grow rapidly in a market where labor-management cooperation has long been a business hallmark.

And, as it pushes German workers to adapt to its management style, Amazon has been tarnished by the strikes, negative news coverage and concerns from some that it is riding roughshod over the country’s customs.

The disquiet peaked in February 2013 after a scathing documentary alleged that immigrant employees Amazon hired temporarily to handle the holiday crush were mistreated. The program, aired by the public ARD network, also alleged that security guards wearing neo-Nazi garb intimidated the workers.

Saying it had “zero tolerance for discrimination and intimidation,” Amazon swiftly ended its contract with the security firm, Hensel European Security Services, whose initials, HESS, recalled Adolf Hitler’s deputy, Rudolf Hess, according to the documentary. But the damage was done.

“It seems that Amazon is giving them an easy target,” said Bernd Fitzenberger, a professor whose research at the University of Freiburg in southwest Germany focuses on trade unions.

Akin to civil rights

Amazon’s anti-union sentiments played out at a much smaller level in the United States last January, when it quelled a unionization bid by a small group of equipment maintenance and repair technicians at a Delaware warehouse. The company also beat back unionization efforts in 2000 at a customer-service center in Seattle.

But it would be a mistake to think about the labor movement in Germany as something akin to union struggles in the United States. Just as protecting its culture is a cornerstone of French society, the right to form a union — protected by Germany’s postwar constitution — is part of the fabric that makes up the country.

“It’s perceived as a civil right, the right to form a union,” Fitzenberger said.

Employee representatives often participate in management decisions through works councils and sometimes on corporate boards. There’s even a German word for management-worker cooperation, sozialpartnerschaft, or social partnership.

The concept grew from the defeat of the Nazis, who often worked closely with German industry. In order to “reattain legitimacy,” many corporations forged tight ties with unions, said Stephen Silvia, an American University professor, who wrote “Holding the Shop Together: German Industrial Relations in the Postwar Era.”

Many economists believe the labor-management cooperation played a critical role in Germany’s re-emergence as a powerhouse after the war, and is a key reason why its economy is among the strongest in Europe.

“Unions are seen as the legitimate voice of workers,” Silva said. “The whole system pretty much has universal acceptance.”

Clash of concepts

Almost all on the picket lines in Bad Hersfeld that June morning talked about their rights as German workers. They believe management has an obligation to respect their desire to form a union and to collectively bargain with them.

“Our culture supports unions, and we are proud of that,” says Jens Brumma, who has worked at the Bad Hersfeld warehouse for four years. “Amazon is thinking it’s the same as in the United States.”

Amazon executives dispute that claim, and that they have any such obligation to negotiate. “The unions are deeply a part of the German culture,” said Ralf Kleber, Amazon’s country manager for Germany. “But they are not important to our industry.”

Kleber argues that Amazon needs flexibility in order to adapt its business to the rapid changes of Web retail. He said the company has been successful in part because it hasn’t been bogged down by negotiations of workplace rules with union officials.

“Our innovation speed is because we have a direct relationship with employees,” Kleber said.

Amazon seems to be betting that Germans will be willing to accept, or at least overlook, those disputes. The company might well win that bet.

Last year, it rang up $10.5 billion in sales in Germany, a 20.6 percent gain over 2012. While still below the 28 percent growth seen in North America, those sales came even as the Germany economy barely budged, growing a scant 0.5 percent, according to the International Monetary Fund.

What’s more, Amazon hasn’t added a major new retail product category since 2011, when it brought Kindle e-readers to Germany.

Strike with limits

One reason the Ver.di strikes haven’t hurt more is that the union isn’t calling on German consumers — or even union members — to shop elsewhere. Slower sales could lead Amazon to lay off workers or shift operations out of the country. That’s something Ver.di wants to avoid.

“We never talk about a boycott,” said Christoph Schmitz, a Ver.di spokesman. “We want Amazon to make big money, and we want workers to get their fair share of that.”

Amazon has made clear that the possibility of moving operations to locales where unions are less likely to find traction is real. The company already operates a returns center in Prague, about 70 miles from the German border. It plans to open another warehouse in the Czech capital next spring, as well as three in Poland this fall, all close to the German border.

Never mind that Amazon doesn’t operate websites in those countries or in their languages. Those Eastern European countries have significantly higher unemployment rates than in Germany, which drives down wages.

The new warehouses, like all of Amazon’s European warehouses, will serve customers throughout Europe. But Kleber said Amazon chose the Czech and Polish locations because they were close to its German customers, and because they could serve customers in Poland and the Czech Republic who shop at Amazon’s European websites.

He denies the warehouses are being built to send a message to German workers that their jobs could easily be moved to less union-friendly climes.

“That’s not a way you make logistics decision,” Kleber said.

Amazon also argues that Ver.di is overreaching when the union insists the warehouse workers be classified as “retail” employees rather than “logistics” staff, which would mean better pay.

Unlike most retail workers, Amazon warehouse employees have little, if any, contact with the shopping public. Instead, many workers stow products as they come into the warehouses, pick products off shelves as orders come in or box items to be sent to customers.

Amazon also insists its pay is as good or better than most warehouse jobs in Germany. Wages generally start at 9.88 euros ($13.08) an hour, jumping 13 percent after a year, according to the company. Night-shift workers also get a 25 percent bump. An October survey by the German magazine Focus found that Amazon’s warehouse workers were better paid than warehouse employees at rival German retailers Zalando and the Otto Group.

Workers, not surprisingly, say it’s not enough. Schierl said the 1,600 euros he takes home each month after taxes means he needs to carpool to work from his home 26 miles away because fuel prices are so high.

“I know a lot of people call in sick because they can’t afford the petrol,” Schierl said.

Some improvements

While they refuse to negotiate with the union, Amazon’s German managers have taken some steps to improve employee relations. Last year, Amazon added two new break rooms, with televisions, refrigerators, vending machines and microwaves, to its vast Leipzig warehouse. That meant workers don’t have to spend much of their 45-minute daily break trudging to and from the main break area at the entry.

The company also put several human-resources executives in heavily trafficked areas throughout the site to answer worker questions about payroll, vacation and more.

“We decided we needed to get closer to associates,” said Armin Cossman, Amazon’s regional director who oversees the warehouses in Leipzig, Bad Hersfeld and Brieselang.

When workers complained about the warehouse being too hot two years ago, Amazon added a climate-control system. In 2011, Amazon was pilloried for running a warehouse in Pennsylvania where temperatures climbed so high that workers collapsed and ambulances lined up in the parking lot to tend to them.

Like many German employers, Amazon has instituted works councils at its warehouses. Employees elect members, who negotiate break times, work processes, vacation guidelines, hiring criteria and more.

At Leipzig, a 19-member council negotiated what it calls “the parent shift,” letting workers who need to get their kids to school start after the school day begins.

But the councils are well short of a union. They can’t organize strikes and they can’t negotiate wages.

Not every worker is convinced a union is necessary. Mandy Seidel, the chairwoman of the works council in Leipzig, is happy with her wages and vacation package.

“I personally don’t see any need for the strike activities,” Seidel said.

‘Pro Amazon’ shirts

Are Germans paying attention to the labor dispute? Sandra Muench, who has worked in quality control at Amazon’s Leipzig warehouse since 2006, thinks so. Not that long ago, she told her dentist she worked at the Amazon warehouse, and her dentist recoiled.

“You should look much worse because of the working conditions,” Muench recalled her dentist saying.

But Muench has always liked her job. She said the pay is good for warehouse work. She believes the union’s “propaganda” could lead Amazon to shift operations elsewhere.

After talking with some like-minded workers, she launched an opposition group asking workers to sign a petition distancing themselves from Ver.di.

The group got more than 718 signatures from full-time and part-time workers in Leipzig. A small but noticeable number show up to work wearing black T-shirts with the words “Pro Amazon” in white above Amazon’s yellow smile logo on the back.

Muench acknowledged there is “some tension” with Ver.di members.

Despite the lack of progress, Ver.di is unlikely to give up the fight. With 2.1 million members, it represents about 5 percent of the German workforce in sectors ranging from health care to media. Amazon, as the world’s biggest online retailer, would be a big-game catch.

“Amazon is a giant in retail. They define the standards for the entire retail sector,” Ver.di spokesman Schmitz said. “It’s a reasonable target for a union like us.”

So Ver.di has hunkered down for a long campaign.

“We know it’s not an easy task,” said Schmitz. “We are willing to take as long as it takes.”

This story was originally published at The Seattle Times.