Daimler Chrysler-A Truly Global Company

1. Introduction

DaimlerChrysler - A truly global company

DaimlerChrysler is unique in the automotive industry and is the world's fifth-largest car maker. Their product portfolio ranges from small cars to sports cars and luxury sedans; and from versatile vans to heavy duty trucks or comfortable coaches. The most valuable brands come together under the roof of DaimlerChrysler: Brands like Maybach, Mercedes-Benz, Chrysler, Jeep, Dodge and Smart are only a few of them. DaimlerChrysler has got a lateral diversification within its product range: It also offers Financial Services next to the production of automobiles. Those are called the DaimlerChrysler Financial Services and the DaimlerChrysler Bank.

The products of DaimlerChrysler are sold in more than 200 countries. DaimlerChrysler operates on a global shareholder base with a global workforce. With almost 390,000 employees it achieves revenues of many billion Euros per year.

Source: Online on 3-12-2005: http://www2.daimlerchrysler.com

2. Employee Representation

2.1 Trade Unions

Within Germany DaimlerChrysler is almost fully unionised with 95% employees being represented by a trade union. Outside Germany, the workforces of almost all production plants with more than 1,000 employees have trade union representation. The two major trade unions representing the employees are the IG Metall in Germany and the UAW (Union United Automobile, Aerospace and Agricultural Implement Workers of America) in the USA.

2.2 Co-Determination within the enterprise

Since DaimlerChrysler is a German stock corporation it has to follow the German Law considering the representation of employees. In Germany is the essential part of the corporate constitution the co-determination of employees. Through co-determination the employees become part of the future development of the enterprise. The legal basis for co-determination is the German Co-Determination Act of 1976. It regulates the representation of employee interests in stock corporations with more than 2,000 employees. Since there are employees involved in the decision making process it might leads to joint decisions within the enterprise (democratic style of participation).

The provisions of the German Works Constitution Act of 1972 also apply to DaimlerChrysler. It contains regulations on cooperation with the Works Council.

2.2.1 Supervisory Board

Besides the Board of Management and the shareholder General Meeting the German Corporation Law provides for a Supervisory Board as controlling body for the Board of Management.

The Supervisory Board consists of a total of 20 members. Of these, 10 members are representatives of the shareholders and 10 members are representatives of the employees. Within the 10 representatives of the employees are three union representatives, a representative of the executive managers and six further members of the workforce.

As you can see from these numbers the employees are represented equally to the representatives of the shareholders. All members of the Supervisory Board have the same rights and obligations.

The most important tasks of the Supervisory Board are the supervision of management, the appointment of the Board of Management and the approval of important corporate planning and decisions.

First of all it seems to be arranged equally, but the casting vote in case of split resolutions is up to the chairman of the Supervisory Board, who is elected from the group of shareholder representatives. So whenever a dispute cannot be solved the final statement is up to the employer's side and not the employees. Another important aspect is that the right of co-determination only applies to the German companies of the DaimlerChrysler AG.

2.2.2 The Labor Relations Director

In a co-determined stock corporation one member of the Board of Management must be a Labor Relations Director, who is appointed by the Supervisory Board. In the case of the DaimlerChrysler AG it is the member of the Board of Management responsible for Human Relations. His task is to include possible effects of enterprise decisions on employees directly. So the corporate planning considers the social aspects of personnel management at an early stage of the planning process.

2.2.3 The Works Council

The tasks of the Works Council are safeguarding the interests of the employees within the enterprise as well as working with the employer. Parts of the overall tasks are the monitoring of compliances with laws, ordnances, accident prevention regulations, collective and internal wage agreements. The rights and obligations are regulated in the Works Council Constitution Act.

It also serves as the employees' authority for hearing grievances, in addition to the employer.

The Works Council is elected by all the employees of DaimlerChrysler for a period of four years. A certain number of employees being elected are fully released from work duties.

2.2.4 World Employee Committee

The World Employee Committee was founded as a world employee representative body, consisting of 13 members. Among these members are six work council members from Germany, three union representatives from the USA and one representative each from Canada, South Africa, Spain and Brazil. It ensures and consolidates the exchange of information and opinions among employee representatives worldwide.

This committee also provides a framework for intensive dialogue between employee representatives and the Group management on economic and social aspects in the global enterprise. Within this framework DaimlerChrysler declares its social responsibility and its support for the nine principles of the "Global Compact", which was born of an initiative by the General Secretary of the United Nations, Kofi Annan.

3. The Management of Industrial Relations

3.1 The Consent way of Management

Management is the control over the production process in determining how employees perform their work within the organization. The limits of management are depending on power. Inequalities of power can result in conflicts.