US multi-nationals and the German industrial relations system

Abstract

This paper critically reviews literature on the behaviour of US-based Multi National Companies (MNCs) in Germany in relation to the historic institutions of the German labour market: works councils and industry wide collective bargaining. The German system is becoming increasingly company-rather than sectorally centred, and US-based companies have reinforced a wing of German employer opinion seeking to further these developments. Surveys show US-based companies generally accepting works councils and sectoral bargains but case study evidence also shows them seeking to weaken links with parts of the system external to the company. A typology is proposed and it is argued that many US-based companies appear to follow a 'formal compliance/content avoidance dichotomy' tending to exacerbate the system's existing tendencies towards disarticulation. They also tend to explore all options available to them within the existing system. A research agenda is suggested.