Liberalizing through Conversion: Multinational Corporations and the Future of Codetermination in Germany

This paper investigates how multinational corporations (MNCs) pressure German institutions for codetermination toward liberalization through processes of conversion. Relying on in-depth interviews with works councilors at a US-based technology firm with multiple subsidiaries in Germany, I illustrate firm strategies to evade the rigidities that codetermination places on production as well as the tactics that workers develop to protect their rights in an emerging field of conflict. Firms have adapted new forms of production – particularly job decomposition and outsourcing – that skirt the formal regulations of Germany’s institutions for codetermination, while workers have innovated new forms of collective action – particularly by coordinating negotiations between works councils and management at the workplace-level with negotiations at the firm-level. While Germany’s institutions for codetermination have largely remained formally resilient since their post-war introduction, codetermination in practice has changed considerably as MNCs doing business in Germany have adapted corporate governance strategies that evade traditional tactics used by labor to protect workers’ rights. I trace three ideal-typical conflicts between management and workers – concerning performance evaluations, management surveillance of workers, and outsourcing – to offer initial insights on the emerging politics of codetermination in Germany. By sketching the conflicts surrounding liberalization of labor market institutions, this paper contributes to recent accounts of the transformation of Germany’s social market economy and proposes a framework for understanding emerging patterns of industrial relations across the OECD’s wealthy democracies.