Destructive Unions

Pfäffikon SZ, Switzerland – Last week I pointed to the acceleration in the great disruption where a range of technological developments is playing a crucial role. The unions would be well advised to quickly adopt this material. In my view the times when union leader, Prime Minister and Minister of State, Wim Kok, stood on a beer box while shouting, are a thing of the past. Even the ever-waning unions will need to reposition themselves for the future.

Water Head
It’s been known that the organisation of the largest Dutch union FNV is a child with a water head. The FNV too, will ultimately have to come to terms with the hard economic laws. It can be considered a missed opportunity that the FNV has still not put these lessons into practice for the benefit of its members. I have been following the escalating conflict between the unions FNV Metaal and CNV with the Limburg car manufacturer VDL Nedcar with increasing amazement.

Unrest
Nedcar’s history in Born can be called impetuous – not to mention its history in Limburg as a whole. The social unrest that followed the closing of the Dutch state mines in the sixties is still fresh in the memories of many. Limburg suddenly became a thorn in the side of the Hague. It was Dr. Hub van Doorne who, in 1967, opened a new passenger car factory for DAF and, in doing so, instilled hope that employment would be saved. Volvos, Mitsubishis and Smarts were to roll off the conveyor belts. A humorous aside is that ABP – the Netherland’s largest pension fund – moved into Limburg in 1968 in order to stimulate jobs.

Mini
Whatever the case may have been, at the start of 2012 things looked differently in Born. Around 1500 employees feared losing their jobs after Mitsubishi suspended production. Ultimately it was the VDL Group from Eindhoven who managed to put together a brilliant deal with BMW through which no less than 200 million euro was invested into the production line. The 1500 employees were let go for the period of rebuilding, but they received job and return guarantees for the production start of the Mini – part of BMW. The factory is the only one in the world to produce the Mini cabrio. Nowadays the factory in Born provides 50% more jobs than before closing in 2012.

Destructive
“A small group of FNV-union members is deliberately damaging VDL Nedcar,” according to director Jan Mooren of VDL Nedcar. It’s an old union trick to effectively take businesses hostage in this manner. Apparently the FNV doesn’t realize how destructive their stance is. BMW is one of the most successful car manufacturers in the world. Trust is hard won and easily lost and this applies to BMW as well. Moreover the FNV shows no indication they understand the current times. FNV membership could come at a serious price to the employee this year.

It remains for me to wish you a good weekend.


Jan Dwarshuis is a senior asset manager at Thirteen Asset Management AG, where he is responsible for the Thirteen Diversified Fund. Dwarshuis writes his columns in a personal capacity and is not paid for them. Nor is he paying for his columns to be placed. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in the above mentioned shares and has no intention of doing so in the next 72 hours.