Buyout-deals and the restructuring of employment relationships in the German automotive supplier industry

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Krakow (2012)

Résumé:

Buyout-deals and the restructuring of employment relationships in the German automotive supplier industry
The acquisition of industrial enterprises by financial investors has become widespread in the last decade in the continental European countries. From the outset employees resisted this, because acquisitions were often followed by higher pressure on working conditions. In recent years, however, in the discourse of civil society and in legislation, the effects of private equity have also been viewed more critically.

The presentation investigates the example of the automotive supplier industry in Germany, where in recent years the spread of financial investors has been stopped. Based on data of 140 automotive suppliers, which have been bought by private equity companies between 2000 and 2011, the presentation shows, why the restructuring failed to materialize. There was an above average rate of companies owned by private equity going bankrupt, the market was not been consolidated and the private equity companies lost their interest in the automotive industry. During the years from 2004 to 2008, around 20 businesses were taken over by private equity firms every year.  However, since then the annual rate has dropped to half as many. These are often firms that are being sold to a second or third financial investor (secondary buyout) or which have already entered insolvency under a private equity firm.  Trade unions and works committees had a
significant part in this process by moulding information networks and intervene in restructuring processes. In addition, the trade unions have influenced a law passed in 2008, giving the works councils more information rights. In addition, the works councils of the final producers (and the employee representatives on their Supervisory Boards) supported the
restructuring of suppliers during the crisis.

However, suppliers owned by financial investors were only supported to a limited extent. In the end, the attitude of the enterprise managements has also changed. Whereas private equity was initially thought of by managers as a fitness program for the company, meanwhile they have observed negative effects on human resources. The results are presented from approx. 15 interviews with works councils of automobile industry suppliers, including Honsel, Peguform, Edscha and TMD Friction.
 

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Géry Deffontaines

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