The mid-October announcement that General Motors Corp.'s European unit would slash as many as 12,000 jobs - most at German subsidiary Opel - led to angry demonstrations in the country just before the start of K 2004.
It was bad news for Germany, where unemployment remains at 10 percent. News reports spotlighted Germany's high labor costs and inflexibility in trade unions. At the K show in Dusseldorf, leaders of the German machinery sector said the country has made progress on labor reform, but more has to be done.
Paternalistic labor laws in Germany are loosening. People are working longer hours and taking concessions. One major change: German employee committees at plants now can work out agreements directly with local management, without the central union, IG Metall.
Bernd KnÃ¶rr, managing director of VDMA, the German Plastics and Rubber Machinery Association, called the GM announcement ``a disaster, a tragedy,'' but said he did not know enough to comment on the need for the mass layoffs. He said the harsh economic news, and other big layoffs in 2004, are jolting average Germans into new ways of thinking.
Large German firms such as automakers can live with industrywide labor contracts. But he thinks it's a big problem for machinery makers and other small and midsize companies.
Helmar Franz, VDMA's chairman and a top executive at Demag Plastics Group in Schwaig, Germany, is not worried that the plant closings at Opel will hurt German automotive molders - or the demand for injection presses in Germany.
The German machinery sector employs 30,000, according to Frankfurt-based VDMA.