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Originally published March 4, 2013 at 8:30 PM | Page modified March 5, 2013 at 8:05 AM

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Battle escalates between Amazon, German labor

The continuing furor raises the question of whether Amazon will be the latest big U.S. company to run afoul of German labor laws, which provide much broader worker rights than in the United States.

The New York Times

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BAD HERSFELD, Germany — Manuel Sauer, a union activist, stood in front of Amazon.com’s colossal gray distribution center here Thursday, holding up a cardboard cutout of a scowling Jeff Bezos, Amazon’s CEO. TV crews crowded in.

Sauer and several other activists unfurled a banner demanding in a curious mix of German and English that the online retailing juggernaut negotiate a union wage contract with its currently nonunion work force here. “Make Tarif Vertrag,” it said in fluorescent letters.

Then the organizers marched toward the gates of the Amazon complex to deliver the results of an online petition drive supporting the union’s demands.

That bit of guerrilla theater was the latest skirmish in an escalating battle between ver.di, one of the largest unions in Germany, and Seattle-based Amazon, which employs 8,000 permanent workers at eight distribution centers in the country, one of the online retailer’s largest markets outside the United States.

Amazon’s labor relations have been under scrutiny by German media since Feb. 12, when one of Germany’s two main public television networks of a documentary about the treatment of some of the 10,000 temporary workers Amazon hired last year to cope with the holiday rush. Many of those workers had been bused in from Spain and Romania, where jobs are scarce.

Shown on ARD, a publicly financed broadcaster considered left of center, the documentary implied Amazon used neo-Nazi security workers to keep workers in line. It showed a team of security workers hired by an Amazon subcontractor roughing up a camera crew outside the temporary workers’ quarters.

The broadcast has since inspired countless headlines and discussions on Germany’s ubiquitous television talk shows, and may even become an issue in national elections this fall in which left-leaning Social Democrats will be challenging the government coalition led by Chancellor Angela Merkel’s conservative Christian Democrats.

The continuing furor raises the question of whether Amazon will be the latest big U.S. company to run afoul of German labor laws, which provide much broader
worker rights than in the United States.

Wal-Mart abandoned Germany in 2006 after an array of setbacks that included a legal struggle with ver.di, which represents 2 million workers in service industries including retailing, hotels, food service and public transportation.

Now it seems to be Amazon’s turn to serve as a symbol for everything that many Germans resent about U.S.-style management.

More flexible job regulations, introduced since 2005, have contributed to a plunge in unemployment. Germany’s 5.3 percent jobless rate is less than half the eurozone’s overall rate of 11.9 percent.

But the changes are perceived by many Germans as creating a class of poorly paid workers with few protections.

Amazon’s workforce more than doubles every Christmas season when it hires an additional 10,000 temporary employees, many of them foreigners.

Amazon, which already pays above the union rate, has refused to negotiate with the ver.di union on wages or any other issue. But so far Amazon seems to be doing a better job than Wal-Mart did in German public relations.

Some of the security agents in the documentary who manhandled a camera crew wore clothing fashionable among neo-Nazis.

The name of the security firm, as the film made clear, was also provocative: H.E.S.S., for Hensel European Security Service. Rudolf Hess, one of Adolf Hitler’s deputies, remains a revered figure among right-wing extremists.

The firm denied any connection to extremist groups. But Amazon fired the security firm, nonetheless.

“We are unhappy at what we saw,” Dave Clark, Amazon’s vice president of worldwide operations, said by telephone from Seattle on Saturday.

“We’ve got to become world class in managing the accommodations of those folks versus delegating to a third party. That is a lesson we learned this holiday.”

Heiner Reimann, a ver.di official, said that every year after Christmas he is flooded with complaints from temporary workers who say they were falsely led to believe they would get permanent jobs at Amazon if they met tough productivity requirements.

He said the nebulous status of temporary workers at Amazon is a year-round issue, but especially so right after the holiday, when large numbers of temps are let go.

Clark countered that virtually all of Amazon’s permanent employees in Germany started out as temporary workers.

He said Amazon was not importing the foreign workers portrayed in the television documentary because they were inexpensive, but because the company could not find enough people locally.

“If we had the ability to staff with local people we would have done it,” Clark said.

The company has expanded rapidly in Germany in recent years, generating $8.7 billion in sales in the country last year.

Of the company’s eight distribution warehouses in Germany, six have opened since 2009. And more hiring is planned, Clark said.

One of the union’s other criticisms is that a Big Brother atmosphere prevails in Amazon distribution centers.

“Everything is measured, everything is calculated, everything is geared toward efficiency,” Reimann said. “People want to be treated with respect.”

But Amazon also has its defenders in Bad Hersfeld, a city of 30,000 in central Germany.

Thomas Fehling, the mayor, said he condemned the poor treatment of temporary workers reported in the German media. But he added, “We have a very positive feeling about Amazon,” which employs 2,500 people here.

For all its digital efficiencies, online commerce can be labor intensive. The German operation offers a mind-boggling assortment of products that besides clothing, sporting goods and home electronics includes more than 50 varieties of fondue sets.

The products are fetched from storage racks by workers known as pickers, who may cover miles on foot in the course of a workday.

Customer orders are packed largely by hand, with productivity of individual employees closely monitored by software on the handheld scanners workers use, and other means. “Feedback” sessions are held for those deemed insufficiently swift.

“Our intent is not to spy with electronics, or to monitor with electronics in a punitive way,” Clark said. “We do expect our employees to perform.”

Fehling, the mayor, frames things in business terms.

“If you want a comfortable job, Amazon is definitely not for you,” he said. “Amazon is a performance-oriented company. Amazon is successful because people want those products and they want those prices.”

There is no sign the debate is cooling.

Peer Steinbruck, leader of the Social Democrats, the largest party challenging Merkel’s governing coalition, has called on Amazon to negotiate with the union.

“A strong company like Amazon doesn’t need to use poor working conditions to create a competitive advantage,” he said.

But Amazon’s Clark said a union contract would not allow the company to pursue what it considered an innovative compensation system, which includes stock bonuses for all workers.

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