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The German ICE and the French TGV currently represent the world's two leading high-speed train technologies. They are however coming under competitive pressure from China, where the world's largest rail-vehicle manufacturer was founded following a merger in 2015. On 26 September 2017, it was announced that the ICE manufacturer Siemens Mobility and Alstom, the TGV maker are to merge by the end of 2018. Both are of a similar size and have altogether 60,000 employees. The entire group is concerned for Alstom whereas for Siemens, the merger only involves their Mobility division.
The new company, Siemens-Alstom will have its headquarters located in the greater Paris region, while the Mobility Solutions' and Signaling division is to remain in Berlin. While officially there is talk of a "merger of equals", Siemens will in fact keep a slight majority share in the joint undertaking and hold six out of eleven seats on the board of directors. For French left-wing politicians and the CGT trade union, this is "scandalous", because the TGV crown jewels of the national industrial property are being sold off "to the Germans". In the past year they had demanded the nationalization of the Alstom group, whose largest shareholder remained the French state, up to 2006.
What roles does government, trade unions and works councils play?
The French government agreed to the de-facto takeover of Alstom, since Siemens will keep its share in the company for at least four years and has accepted social obligations. These include guarantees for no plant closures, no compulsory redundancies and investments in research and development up to the end of 2022. The French minister of economics, Bruno Le Maire, will personally head a working group ("comité national de suivi"), which is to monitor Siemens' obligations towards Alstom together with employee representatives. For Le Maire, it is the state's duty to guarantee "the strategic industrial interests of the French nation". In October 2016, François Hollande, the president at the time, had ordered additional TGV trains for the sum of a half billion €, in order to save the threatened Belfort site.
The situation is however different in Germany, where it is the trade unions and works councils who are responsible for the monitoring the obligations, and not the government. The IG Metall trade union underlines that management has guaranteed to maintain collective bargaining and codetermination as well as the working conditions. "The supervisory board employee representatives have ensured that the conditions for the merger take into account the interests of the employees". However the social guarantees apply only to Germany and France. Other countries such as Italy and Poland, where Alstom has manufacturing plants, are not covered. Perhaps the two European works councils will succeed in filling in this gap.
Two completely different cultures in the European works council
In Alstom, a "European Works Forum" (EWF) has been in place since 1996. After the sale of its energy division since November 2015 it has only continued to represent one third of the former workforce and its EWC agreement was updated. The employer is chairman since it is under French jurisdiction. The consultation procedure is described in detail and has been used extensively in practice, including the recourse to external expertise. This is typical for a French EWC, since the EU Directive was strongly inspired by the French model. Alstom's European Works Forum is to be dissolved in the course of the merger, unless another alternative is negotiated.
In Siemens, there has been a European works council, "Siemens Europe Committee" (SEC), in place since 1995, under German jurisdiction. Although the group is composed of a multitude of divisions and product groups, no European Divisional works councils have ever been established. Instead there are so-called "Cluster-Meetings" for geographical zones in Europe. The German Group works council is generally the most important instance for the large industrial groups having their head offices in Germany, and the European works council comes only in second place. E.g. it was not at all involved in the signing of an international framework agreement in 2012 . German EWC bodies have, in general, a lot of room for catching up on the intensive use of consultation rights "à la française".
General Electric as "blueprint" for a new EWC structure?
In 2014, Siemens wanted to sell its rail technology to Alstom in return for the acquisition of their Energy division. The race for their Energy division was however won by the US conglomerate General Electric. Alstom's European works council had previously fought out commitments from management on socially responsible downsizing - a complete novelty for a US company, but which was only achieved under the threat of legal action.
A Special Negotiating Body (SNB) was established for General Electric according to article 13 of the EWC Directive, which has until March 2018 to negotiate a completely new EWC agreement for the 95,000 employees in Europe. Up to then, the five existing European works councils (including a temporary body for the former Alstom sites) will continue to operate independently under the umbrella of General Electric. In the future, there may be six European Divisional works councils established with a EWC at the Holding level. This model reminds us of the Airbus example, where there are likewise several Divisional works council.
Press report here: http://www.euronews.com/2017/09/26/siemens-and-alstom-set-to-merge-rail-assets
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