Amazon's Labor Relations Under Scrutiny in Germany

The latest skirmish in an escalating battle between ver.di, one of the largest unions in Germany, and Amazon, which employs 8,000 permanent workers at eight distribution centers in the country, one of the online retailer’s largest markets outside the United States. Deservedly or not, Amazon’s labor relations have lately come under intense scrutiny by German media.
JACK EWING
http://www.nytimes.com/2013/03/04/business/global/amazons-labor-relations-under-scrutiny-in-germany.html?partner=socialflow&smid=tw-nytimesbusiness&_r=0
The New York Times
March 3, 2013

 

BAD HERSFELD, GERMANY — Manuel Sauer, a union activist, stood in front of Amazon’s colossal gray distribution center here last Thursday, masquerading as the company’s chief executive, Jeff Bezos, by holding up a cardboard cutout of a scowling Mr. Bezos. Television crews crowded in for the money shot.

Then Mr. Sauer and several other activists unfurled a banner demanding in a curious mix of German and English that Amazon, the American online retailing juggernaut, negotiate a union wage contract with its currently nonunion work force here. “Make Tarif Vertrag,” it said in fluorescent letters. Then the organizers marched toward the gates of the Amazon complex to deliver the results of an online petition drive supporting the union’s demands.

That brief bit of guerrilla theater was the latest skirmish in an escalating battle between ver.di, one of the largest unions in Germany, and Amazon, which employs 8,000 permanent workers at eight distribution centers in the country, one of the online retailer’s largest markets outside the United States. Deservedly or not, Amazon’s labor relations have lately come under intense scrutiny by German media.

The triggering event was a Feb. 12 broadcast by one of Germany’s two main public television networks of a documentary about the treatment of some of the 10,000 temporary workers that Amazon hired last year to cope with the holiday rush. Many of those workers were bused in from countries like Spain or Romania where jobs are scarce.

Aired on ARD, a publicly financed broadcaster considered left of center, the documentary even implied that Amazon used neo-Nazi thugs to keep workers in line. It showed a team of security workers hired by an Amazon subcontractor roughing up a camera crew outside the temporary workers’ quarters.

The broadcast has since inspired countless headlines, preoccupied pundits on Germany’s ubiquitous television talk shows and may even become an issue in national elections this autumn in which left-leaning Social Democrats will be challenging the government coalition led by Chancellor Angela Merkel’s conservative Christian Democrats.

The continuing furor raises the question of whether Amazon will be the latest big American company to run afoul of German labor laws, which provide much broader worker rights than in the United States.

Walmart abandoned Germany in 2006 following an array of setbacks that included a legal struggle with ver.di, which represents two million workers in service industries including retailing, hotels, food service and public transportation. The name is an abbreviation of Vereinte Dienstleistungsgewerkschaft, or United Service Industries Union.

General Motor’s Opel unit, represented by the IG Metall union in Germany, has struggled for more than a decade to cut costs and stem losses in the face of strong worker resistance. Last week, Opel finally struck a truce with its employees that will allow it to close a factory in Bochum, Germany, in 2016 — but only after promising not to impose involuntary layoffs.

Now it seems to be Amazon’s turn to serve as a symbol for everything that many Germans resent about American-style management and so-called Anglo-Saxon capitalism. As an American company that has helped drive at least one German competitor out of business and makes heavy use of temporary workers, Amazon is a ripe target.

More flexible job regulations, introduced since 2005, have contributed to a plunge in unemployment. Germany’s 5.3 percent jobless rate is less than half the euro zone’s overall rate of 11.9 percent. But the changes are perceived by many Germans as creating a class of poorly paid workers with few protections. Amazon’s work force more than doubles every Christmas season when it hires an additional 10,000 temporary employees, many of them foreigners.

Amazon, which already pays above the union rate, has refused to negotiate with the ver.di union on wages or any other issue. But so far Amazon seems to be doing a better job than Walmart did in German public relations.

Some of the security agents in the documentary who manhandled a camera crew wore clothing fashionable among neo-Nazis. The name of the security firm, as the film made clear, was also provocative: H.E.S.S., for Hensel European Security Service. Rudolf Hess, one of Adolf Hitler’s deputies, remains a revered figure among right-wing extremists.

The firm denied any connection to extremist groups. But Amazon fired the security firm, nonetheless.

“We are unhappy at what we saw,” Dave Clark, Amazon’s vice president of worldwide operations, said by telephone from Seattle on Saturday. “We’ve got to become world class in managing the accommodations of those folks versus delegating to a third party. That is a lesson we learned this holiday.”

Heiner Reimann, a ver.di official, said that every year after Christmas he is flooded with complaints from temporary workers who say they were falsely led to believe they would get permanent jobs at Amazon if they met tough productivity requirements. He said that the nebulous status of temporary workers at Amazon is a year-round issue, but especially so right after the holiday, when large numbers of temps are let go.

But Mr. Clark countered that virtually all of Amazon’s permanent employees in Germany started out as temporary workers.

He said Amazon was not importing the foreign workers portrayed in the television documentary because they were inexpensive, but because the company could not find enough people locally. Unemployment in Bad Hersfeld and the surrounding area is about 5 percent. “If we had the ability to staff with local people we would have done it,” he said.

The company has expanded rapidly in Germany in recent years, generating $8.7 billion in the country last year as it provided Germans with a consumer cornucopia of everything from books and MP3 players to vacuum cleaners and kayaks. Of the company’s eight distribution warehouses in Germany, which it calls fulfillment centers, six have opened since 2009. And more hiring is planned, Mr. Clark said.

One of the union’s other criticisms is that a Big Brother atmosphere prevails in Amazon distribution centers.

“Everything is measured, everything is calculated, everything is geared toward efficiency,” Mr. Reimann said. “People want to be treated with respect.”

But Amazon also has its defenders in Bad Hersfeld, where the company is one of the main employers in this city of 30,000, optimally located in central Germany at the junction of two major highways.

Thomas Fehling, the mayor, said he condemned poor treatment of temporary workers reported in the German press. But he added, “We have a very positive feeling about Amazon,” which employs 2,500 people here.

Among local citizens, opinion about Amazon seems to be split. Some former employees writing to the Kreis Anzeiger, a local newspaper, complained of an unpleasant work atmosphere and extreme pressure to produce.

But one, who said he had worked 12 years for the company, disagreed. “The work climate was and is always good,” he wrote, “and the co-workers as well as the lead managers are fine.”

For all its digital efficiencies, online commerce can be labor intensive. The German operation offers a mind-boggling assortment of products that besides clothing, sporting goods and home electronics includes more than 50 varieties of fondue sets. The products are fetched from storage racks by workers known as pickers, who may cover miles on foot in the course of a workday.

Customer orders are packed largely by hand, with productivity of individual employees closely monitored by software on the hand-held scanners workers use, and other means. “Feedback” sessions are held for those deemed insufficiently swift.

“Our intent is not to spy with electronics, or to monitor with electronics in a punitive way,” Mr. Clark said. “We do expect our employees to perform.”

Amazon’s relentless focus on efficiency enables it to deliver most products the next day and often beat competitors on price. Neckermann, once among the largest catalog retailers in Germany, became insolvent last year in part because it was unable to compete successfully with Amazon online.

A taxi driver in Bad Hersfeld, who did not want to be quoted by name because a close relative is still employed by Amazon, said he had worked as a picker one Christmas season and found the work demanding but not unreasonably so. It was less stressful than driving a taxi, he said.

Mr. Fehling, the mayor, frames things in business terms. “If you want a comfortable job, Amazon is definitely not for you,” he said. “Amazon is a performance-oriented company. Amazon is successful because people want those products and they want those prices.”

There is no sign yet that the controversy stirred by the documentary is cooling.

Peer Steinbrück, leader of the Social Democrats, the largest party challenging Ms. Merkel’s governing coalition, has recorded a video message in support of the online petition drive calling on Amazon to negotiate with the union.

“A strong company like Amazon doesn’t need to use poor working conditions to create a competitive advantage,” Mr. Steinbrück says in the video. He promises that, if elected, he will tighten rules governing temporary workers.

But Mr. Clark of Amazon said a union contract would not allow the company to pursue what it considers an innovative compensation system, which includes stock bonuses for all workers.

Amazon’s policy of neither confronting nor engaging with the union was evident on Thursday, when the small group of ver.di organizers, including Mr. Reimann and Mr. Sauer with his Jeff Bezos prop, gathered outside the gates to one of Amazon’s distribution centers on a hillside outside Bad Hersfeld.

They had come to present 37,000 signatures gathered online. The activists were far outnumbered by reporters and camera crews, drawn by the prospect of a telegenic confrontation with management. But Amazon, it soon became clear, had decided to defuse the moment.

Mr. Reimann pressed a buzzer next to the security gate. When a voice over the intercom asked who was calling, he demanded to be admitted to deliver the signatures.

Unexpectedly, the gate opened, and Mr. Reimann and the other ver.di activists tramped across an enclosed metal bridge, trailed by journalists.

They were met inside by a trio of friendly receptionists, who cheerily issued visitor passes to everyone. Nearby, a table was piled with bananas and a sign, “Amazon Fruit Day.”

As Mr. Reimann gave interviews to television reporters, photographers snapped Amazon workers on their way to a nearby cafeteria.

But soon came word: No Amazon officials would be meeting with Mr. Reimann’s group this day. So the activists handed their box of signatures to the ever-beaming receptionists, and everyone left.

Melissa Eddy contributed reporting from Berlin.

March 3, 2013