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How the EU’s Eastern Enlargement Changed the German Productive Model. The Case of the Automotive industry

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  • Krzywdzinski, Martin

Abstract

What impact did the Eastern Enlargement of the European Union have on the productive models and labor relations in the German automotive industry? Did it lead to a “race to the bottom” and “social dumping”? This article examines the evolution of value chains and product strategies as well as the development of employment and labor relations in the German automotive industry and discusses the hypotheses of “dualization” or “disintegration.” It is based on case studies of automobile manufacturers and suppliers as well as on statistical data about employment, foreign trade, and foreign direct investment. The analysis shows that the use of low-cost locations in CEE allowed German automotive companies to strengthen their focus on high-quality products without losing their price competitiveness. German companies have used relocation threats to demand labor cost reductions and higher flexibility on working times and employment (i.e., the use of agency work) in their home country locations. These demands, however, did not go as far as to break the governance compromises in the German automotive industry. The metalworking union and the works councils still remain strong enough to reach compromises that guarantee employment security in exchange for higher flexibility and that set limits on the use of precarious employment forms.

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  • Krzywdzinski, Martin, 2014. "How the EU’s Eastern Enlargement Changed the German Productive Model. The Case of the Automotive industry," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 15.
    • Handle: RePEc:rvr:journl:2014:10663
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    References listed on IDEAS

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    1. Ahlers, Elke & Öz, Fikret & Ziegler, Astrid, 2007. "Standortverlagerung in Deutschland: Einige empirische und politische Befunde," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 194, March.
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    4. Streeck, Wolfgang & Rehder, Britta, 2003. "Der Flächentarifvertrag: Krise, Stabilität und Wandel," MPIfG Working Paper 03/6, Max Planck Institute for the Study of Societies.
    5. Eichhorst, Werner & Marx, Paul, 2009. "Reforming German Labor Market Institutions: A Dual Path to Flexibility," IZA Discussion Papers 4100, Institute of Labor Economics (IZA).
    6. Dribbusch, Heiner, 2010. "Tarifkonkurrenz als gewerkschaftspolitische Herausforderung: Ein Beitrag zur Debatte um die Tarifeinheit," WSI Working Papers 172, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
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    Cited by:

    1. Pérez Sánchez, Laura À. & Velasco-Fernández, Raúl & Giampietro, Mario, 2024. "Analyzing the energy metabolism of the automotive industry to study the differences found in this sector across EU countries," Energy, Elsevier, vol. 296(C).
    2. Tamás Gerőcs & András Pinkasz, 2019. "Relocation, Standardization and Vertical Specialization: Core–Periphery Relations in the European Automotive Value Chain," Society and Economy, Akadémiai Kiadó, Hungary, vol. 41(2), pages 171-192, June.

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    More about this item

    Keywords

    industrie automobile; élargissement à l’Est de l’Union européenne; relations de travail; investissement direct étranger; dualisation; automotive industry; Eastern Enlargement; labor relations; foreign direct investment; dualization; Germany; indutria automotriz; ampliación de la Unión Europea hacia el Este; relaciones de trabajo; inversión extranjera directa; dualización; Alemania;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General

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