"Kurzarbeit" is a German expression that essentially means, "We're cutting your hours, but we're not laying you off." It's an imperfect solution to a nagging problem in a world beset by economic stagnation, flagging manufacturing, and, in the US, massive layoffs and the waste of "human capital."
Rather than sacking loyal, trained workers, many struggling German companies simply cut the hours of all employees in order to preserve jobs and, ultimately, the enterprise. On days when they don't work, employees attend training sessions. German workers are treated as assets, not "overhead," and German managers are making a bet -- sticking out their necks -- in hopes that new orders will come in, and an economic recovery will indeed come.
Everyone is in the same boat. Labor-management negotiations are sometimes contentious, but both sides know they must live with the other. The result is consensus. While work weeks are reduced under the German system, few lose their livelihoods. Everyone has a reason to get out of bed each morning and go to work.
Especially for US engineers, it's grim to contemplate the sheer amount of expertise and wisdom lost as companies have shed thousands of skilled workers during the Great Recession of 2008. Despite the bottom-line mentality of managers, American engineers and workers remain the most productive in the world.
One thing is clear: Any nation that wishes to remain competitive in global technology and manufacturing must nurture its workforce. In our 40th anniversary year, this publication is championing the revival of US manufacturing. We can learn from the Germans and their enlightened policies for treating skilled workers with respect while preserving jobs and the dignity of work. The result there has been the nurturing of German industries, most of which have survived and prospered in the middle of a European sovereign debt crisis.
Some readers will counter: What? Adopt a German system just this side of socialism? True, labor costs may be higher in Germany, but Deutschland remains perhaps the only growing economy in Europe, a bastion of stability on a continent wracked with economic angst. And German manufacturing quality remains superior because workers are well-trained and maintain a largely optimistic view of the future. Job security makes workers more productive.
Still, notes a friend of EE Times who survived the worst days in Germany after World War II and prospered under its post-war vocational system, "there is no free lunch in Germany."
I like the first part where you cut hrs instead of laying off simply because for no other reason is good workers are hard to find and expensive to train. Giving workers job stability with decent pay means you'll get their best especially if they get a piece of the action.
The other side is when business is good they can work overtime so you don't have to add more that later likely have to fire as demand drops as does every 3-5 yrs on average in the US.
The second part is how unions, guilds, etc keep people out, not really to teach them. Just start new ones on the drone work and let them advance as they learn.
I'm about to start 6 or more new business' and employees are the biggest problem. Finding good ones is expensive and pays to keep them around. If you have good employees and not enough work, find more work in other areas or upgrading, etc.
I know of 10 different business in RE, EV's, transportation that can be started cheap and make good money. Have a few so if times get bad, you have alt work to keep your workers or you'll pay the price like many now as demand ramps back up.
As you say, George, there will be those who will say see a German socialistic flare in these policies, but I don't see it that way. Seems to me it's just good business to find a way to keep productive employees when times are tough. More good minds translate to better product design.
I agree, Chuck. It's good business from the standpoint as others have suggested here that finding and training good talent is difficult even in these times of high unemployment. The other things that really makes sense is that workers feel a sense of value and loyalty from their employers, which has to translate in more dedicated and productive workers. It's hard to muster up your best work when you feel your job could be eliminated at any time.
It is good business to keep your trained and experienced employees around, but envision this scenario. The engineers at the company are retained and given a cut from 40 paid hours to 35 paid hours. Now, of course, the business climate improves. Now said engineers must work 50-60-70 hours to get the product out the door. However, since overtime is unpaid, it's a win for the company! Now, they don't have to boost their paid hours back up to 40, just make them work more unpaid overtime to 'keep' their jobs. And don't think that most companies won't do this. It's like waving free money in their faces.
Europe has had a system of codetermination, where a company's workforce holds one or more seats on the board of directors. So it's not completely unusual to see the concpet of Kurzarbeit come up.
However, it's not as rosy as some may think. France reduced the national work week 10 or so years ago, in an effort to cut their unemployment. The result? Pay went down to 35 hours equivalent. The number of employed did not go up materially, and professional workers were expected to work the full 40 hours, unofficially, and to do exactly the same work they had before, but for less pay.
Why Germany would think their experience will be any different I don't know.
Particularly when you consider that engineers tend to be more focussed on the work than the clock, I would expect to see little shift, except among blue collar workers.
So they may call it Kurzarbeit. What they mean is Kurzbezahlung.
There have been some amazing stories in US manufacturing in recent history. Take for example the Polartec story. In an old mill town in Massachusetts Malden Mills manufactured the finest fleece textile fabric in the world.
In 1995 Malden Mills suffered a catastrophic fire and burned to the ground. The company, however, continued to pay all of its employees their full salaries!
Polartec survives although not without having gone through several bankrupsies due to the cost of rebuilding, the economic climate and global competition.
This isn't a new idea! My grandfather went through this during the Depression. The airplane factory in Ohio put the workers on 25 hour (3 day) work weeks to keep all of their employees. Some moved, some left for other jobs, but no employees were fired or laid off. My grandfather got a job with NCR and stayed 33 years until retirement. The airplane factory asked if he wanted to come back more than once, but the NCR deal was too good to leave.
A company that keeps key people is ahead of the game no matter how they are kept. I have been thru a few of those reduced work week times. The company I work for has, when work picked up, reimbursed us for the time missed. I didn't mind much because both those actions gives me a warm & fuzzy feeling about the company & it's future.
Intelectual property is priceless & because of that I have been here for 28 years .....& I like work. Patting myself on the back now.
As for Polartec, I prefer it's product over all other fleeces, it is stil superior & I believe it's because of the companies actions
HP and Agilent have used this method more than once. It did not generate resentment, to the contrary, it built a team spirit that said we were all in this together. It does work for short term or small increments of reduction but if the reduction numbers were 20-25% or higher, you would not only get resentment, you would have a lot of folks quitting or retiring.
The team spirit that was created was later lost when we found out that certain high-level managers received raises and/or bonuses during the period we were "all sharing the pain". That caused resentment.
Spears Games (UK) is another example. The founders sold the company and retired. When the new owners starting closing plants and laying off workers, the Spears family bought the company back and brought back all of the workers.
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