Beyond survival: the implementation of new forms of work organization in the UK and German steel...

The International Journal of Human Resource Management 3:2 September 1992

Beyond survival: the implementation of newforms of work organization in the UK andGerman steel industries

Jonathan Morrisy PaulBlyton, Nick Bacon andHans-Werner Franz

Abstract

This paper outlines and analyses the major changes in work-force organizationthat have been introduced by British and German steel producers in the pastdecade, against a backcloth of retrenchment in the industry, new productdevelopment and technological change. Including multiskilling, a reduction indemarcation and team-working, these changes have had a major effect upon thecomposition of the work-force and the nature of work undertaken at theshopfloor level.

While these changes have had a common broad trajectory, they have beenintroduced at a different pace and in different forms. The contrasts are providednot only at the international level, but between plants in the same countries. Thepaper further outlines the response of trade unions to these changes and theimplications for industrial relations at the shopfloor level.

Introduction

The steel industry has undergone fundamental changes over the pastdecade, including a scaling down of capacity, substantially reducedmanning, the introduction of major technological change and a move tofar higher-quality standards. As a result of these developments, andaccompanying them, there have been major changes in work organization(Blyton, 1992; Franz, 1991).' Indeed, it could be argued that, if anything,work-forces in the steel industry have undergone even greater change,including modifications to traditional working methods in the light oftechnological change (particularly in areas such as casting); the develop-ment of new forms of work organization involving fewer skill and jobclassifications and reductions in demarcation (blurring craft/operatorlines and multi-skilling); reorganizing craft and production work (team

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working); changes to bargaining and seniority systems (including merit-based seniority); an increased use of numerical flexibility, especiallythrough subcontractors; and increasing involvement in quality assurance.The steel industry, perhaps contrary to popular perceptions, lies at theforefront of developments at the technical and organizational levels. Interms of process technology, for example, microprocessor technology isused throughout the main areas of steel production, including blastfurnaces, casting and rolling. Multi-skilling is also becoming widespread,while teamworking is also being introduced, though not without consider-able trade-union resistance to aspects of its implementation.

This constellation of changes contains various implications for manninglevels, training programmes, skill and task definitions and promotionroutes. As such they pose important questions for industrial relations andtrade unions and for the nature of work organization and the labourprocess (particularly the job enlargement and enrichment versus jobintensification debate). These changes need to be assessed as to the extentto which they break fundamentally with previous patterns of industrialrelations and work organization or merely represent incremental develop-ment. It will be our contention that they do, in their entirety, represent amore fundamental shift, but that their implementation has often beenpiecemeal and incremental.

This article reports comparative Anglo-German research, and highlightstwo features, stressing, on the one hand, commonality and, on the other,uniqueness.^ While a common trajectory of change is identifiable through-out plants, companies and countries, there has also been considerableunevenness, certainly in the pace of change, in the prioritization of theintroduction of different changes and in the change process itself.The article is divided into five further sections. The next section gives abrief economic background to the changes in work organization, while thethird section explains the different industrial-relations systems in the twocountries, which is vital to understanding the nature, pace and style ofchange in work organization in the two industries. The fourth sectiondescribes and analyses the major changes in work organization, while thefifth outlines the responses of organized labour in the UK and Germany.

Restructuring steel: the two 'waves'

The restructuring of the UK and (West) German steel industries - and thewider EEC steel industry - has occurred in two phases which may bedescribed as waves.•' The two waves are distinctive in their nature, durationand timing. Moreover, these waves differ considerably between the UKand Germany, not so much in their nature as in their intensity.

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New forms of work organization in UK and German steel industries

Table 1 Employees in the iron and steel industry

1974

1979

1980

1983

1989

West Germany

232.087

204,813

197.406

163,748

130,123

UK

194.347

156,579

112.120

63,693

53.758

EEC

792.191

670,111

597.873

479,220

394,628

Source: Iron & SleelStatislical Yearbook. 1980. I99().

The first wave of restructuring dates from the mid-1970s and can becharacterized by rationalization, specialization, plant closure (particularlyin the UK) and reduced manning. Between 1974 and 1980, for example,the work-force in the steel industry fell by 17 per cent in West Germanyand 41 per cent in the UK (see also Bacon et al., 1991). This reduction waspredicated by over-capacity, a feature compounded by global recession asa result of the 1974 oil crisis, new capacity coming on-stream elsewhere(particularly in the newly industrialized countries) and intense competitionparticularly from Japan. In Germany the manpower reduction was arelatively smooth one, with a gradual reduction of the work-force ona year by year basis, broadly in line with wider EEC trends, which saw a24 per cent work-force decline during the 1970s (see Table 1). UKmanpower reduction, meanwhile, was also comparatively smooth between1974 and 1979, but in 1979-80 there was a sharp decline in the work-force,with almost half of the 82,227 total 1974-80 job loss experienced in thatone year. Overall, however, the 1974-80 period was characterized bysteady job loss in both Germany and the UK. Much more abrupt andintensive work-force reduction was to follow in the next three years,particularly in the UK where the work-force was nearly halved (a reductionof 43 per cent or 48,000) between 1980 and 1983. Work-force decline inGermany was less severe (a reduction of 17 per cent or 33,658), butnevertheless marked. If these figures were not stark enough, the job losseswere extremely geographically concentrated in industrial regions such assouth Wales, Scotland, the north east of England, the Ruhr and the Saar,which translated them into deep localized social and economic crises (forthe impact of job closures, see Bacon, 1991; Harris, 1987; Fevre, 1989;Morgan, 1983; Rommelspacher, 1988).

The early 1980s thus represented a watershed in the steel industry. By1983 the dramatic job losses had finished and with this the first wave ofrestructuring (though work-force reductions continued at a slower pace;see Table 1). At this point the second wave of restructuring became more

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prominent, involving far-reaching changes to the internal work organiz-ation. Whereas the first wave is well documented, as is the politicaleconomy of steel restructuring (see above references, plus Aylen 1988;Blyton, 1992; Esser and Fach, 1989; Rhodes, 1985; Upham, 1980, 1990),the second wave is as yet relatively uncharted, despite its emergence in theearly-to-mid 1980s (exceptions are Blyton, 1992; Franz, 1991). Whilework-force reductions have continued in the 1980s and 1990s, accompaniedby further plant closure in the UK, the distinctive characteristics of thesecond wave have been radical changes in work organization seekingfunctional and numerical flexibility (including multi-skilling, teamworking,reductions in demarcation, moves towards merit-based, as opposed toseniority-based, promotion and increased subcontracting), along with totalquality management and a consequent greater commitment to training andretraining. Franz (1991) views this as part of either a modernization ofpaternalism or more advanced human resource management concepts,ultimately what he terms de-Taylorization. Certainly, this whole gamut ofchanges is slowly transforming established work practices and arrange-ments, some of which have been in place for nearly a century (Elbaum,1984; Elbaum and Wilkinson, 1979; Stone, 1974), and consequentlyimpacting upon the industrial-relations and collective-bargaining frame-works (Blyton, 1992; Kelly, 1984). The first wave/second wave divide is, toa certain extent, indicated in the respective output figures shown inTable 2. Between 1974 and 1984, output fell in both Germany and the UK,illustrating capacity cuts and/or closures. However, in the 1983-9 periodoutput grew, indicative of jobless growth as a result of productivityimprovements due to, among other factors, changes in work organization.

Table 2 Production of crude steel (million tonnes)

1974

1979

1980

1983

1989

West Germany

53.2

46.0

43.8

35.7

41.1

UK

22.4

21.6

11.3

15.0 .

18.8

EEC

155.6

140.3

127.7

109.5

139.6

Source: Iron & Steel Yearbook, 1980. 1982, 1990; Euroslat.

This shift from the first to second wave is perhaps best encapsulated atthe strategic level in British Steel (BS). In the early 1980s the key termsused by the then-nationalized corporation were survival and the stemmingand reduction of losses. This was exemplified in the conditions which were

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attached to the lump sum bonus (LSB) scheme, which has become centralto the bargaining machinery (and which will be described in the nextsection) in BS. However, by the late 1980s and early 1990s, the term 'totalquality performance' was being invoked, and the LSB was dependent noton shedding manpower (although this was still an important factor even inthe successful plants), but more on trade unions accepting new workpractices. Moreover, quality, due to market-led pressure from end-userssuch as the automotive and packaging industries, has been a major impetusfor change, as has cost reduction. The third major impetus has been theintroduction of new technology which has transformed the industry from arelatively low-technology one, based upon worker experience, to a high-technology industry based on new skills. This is especially true in the keyiron- and steel-making areas of the blast furnaces, casting and rolling mills.

As the introduction has indicated, it is our contention that the broadtrajectory of change in both the UK and German steel industries is similar;that is, there has been a move to higher-quality steel production based onnew skills, changes in work organization and vocational training andretraining. Indeed Franz and Lichte argue that this is a pan-Europeantrend (Franz, 1991; Franz and Lichte, 1989). However, we will also arguethat the pace, and sometimes even the nature of change, is extremelyuneven. At the most obvious level there are differences between the UKand Germany, but these differences are also apparent between firms inGermany and between different plants of single firms in both countries.Two reasons are evident for this: first, managerial implementationstrategies differ from company to company and between plants; and,second, differences reflect differing local industrial relations and trade-union responses. Before going on to analyse the major changes occurringat plant level, it is necessary to summarize the different industrial relationsand collective bargaining structures and the changes these have undergoneover the past decade.

Restructuring labour-management relations: collective bargainingand industrial relations issues

The industrial relations structures in the UK and Germany are different ina number of important respects (for a lengthier description and analysis,see Bacon et al., 1991; Bain, 1988; Thimm, 1987a, 1987b). First, theGerman industry is characterized by a single-union structure (IG Metall),whereas Britain has a multi-union structure (with one main productionunion, the ISTC, plus the TGWU, the craft unions, involving the GMB,AEU and EEPTU, and a managerial union, SIM A). Further, while IGMetall has almost three million members spread across the engineering and

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steel sectors, the main union in steel in Britain, the ISTC, has less than50,000 members, all located in steel.

The second major difference is in the structure of bargaining. TheGerman system has been extremely stable, principally because it isenshrined in law. Essentially pay is determined at the national level,between the employers' federation and IG Metall; hours and holidays arenegotiated at the district level (Dortmund, for example), while the wagestructure plus a variety of conditions are negotiated at the local level, bythe works council for each plant. The works council is one of two legalforums of worker participation and is elected from all employees at theplant level. According to a legally established ratio corresponding tothe size of the employed work-force, part of the works council representa-tives are 'liberated from work' and have to be paid by the company. Thereis also an integrated works council (Gesamtbetriebsrat) at the enterpriselevel and, if necessary, at the level of the corporation (the corporate workscouncil). Both are formed by works-council representatives of therespective lower levels. In the steel industry works-council representativesare all trade unionists, reflecting the high unionization rates.

Alongside this works-council structure, which is based on the WorksConstitution Act, there is a second structure based on the Co-determinationAct for the Coal and Steel Industry which guarantees full parity on theadministrative or supervisory board, representatives being delegated fromthe works council and from the national union. Moreover, the so-calledlabour director, who is a full member of the executive board of theenterprise and responsible for all social and personnel affairs includingvocational training and work organization, cannot be elected from theadministrative board against the vote of the union. He tends, therefore, tobe a union appointee.

We would argue that this structure has had four important outcomes forwork reorganization. First, the union in Germany has been more open tothe introduction of change (such as teamworking), because there are fewerreasons to consider those changes a threat to union power; second, there isno potential for inter-union disputes; third, the legal structures of workscouncils and co-determination, which both have to be financed by theenterprise without the possibility of withdrawal in the case of confiict, haveenabled the union to be far more proactive in the management of change;and, fourth, the centralized nature of bargaining has enabled IG Metall tooffer a far more united front in the change process.

In contrast to relative stability in Germany, the UK steel industry haswitnessed a number of key changes in its industrial-relations and collective-bargaining structures since 1980. First, there has been a far greaterassertion of management prerogative, largely as a result of changing powerrelations since the 1980 national steel strike. Elsewhere, we have argued

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that this has occurred virtually independently of the ownership change inthe industry, namely privatization (Bacon etal., 1991). Second, and arisingfrom the first factor, there has been some simplification of the bargaining

• machinery in certain respects, notably in the approach of British Steelmanagement to multi-union negotiations. While craft unions have, incertain situations such as craft restructuring, maintained their autonomy asbargaining units (although even in this area craft restructuring is negotiatedbetween management and one body representing craft workers), in others,such as the local 'Slimline' committees (which negotiate, for example,manning levels), management has simplified the process by negotiatingonly with one joint-union committee.

The third key area of industrial relations change in the British steelindustry has been the decentralization of collective bargaining. Whereas inthe later 1960s and 1970s much of the bargaining process was highlycentralized (pay being negotiated nationally with individual unions, otherterms and conditions with the national joint TUC Steel Committee), in the1980s and 1990s there has been a continued shift to more localizedbargaining. The 1988 pay agreement was effectively the last nationalagreement (Avis, 1990). Bargaining for pay has become increasinglydevolved to the divisional level (British Steel has five divisions: generalsteels, strip products, distribution, stainless and diversified activities) and,for certain issues (for example conditions attaching to the lump sumbonus), to the individual plant level. The management rationale for suchchange is a market-driven one: that diversified product markets experiencedifferent business fortunes (Avis, 1990). To date, this has had relativelylittle impact in terms of different bargaining outcomes; the trade unions inthe two big divisions, general and strip, have managed to negotiate verysimilar deals and the smaller divisions have followed suit. However, themachinery for change is clearly in place.

While decentralization of collective bargaining to divisional level withinBritish Steel has, to date, had only limited impact, the fourth morepronounced change, to pay determination, has had a major effect.Essentially, pay is now comprised of two parts: the majority is negotiatedat the divisional level, but a significant minority is determined at the plantlevel, through the lump sum bonus, which varies from plant to plant bothin terms of the actual amount paid and the potential amount earned, butcan be as much as 18 per cent of total pay. This is a further aspect ofdecentralization, tying pay to performance at a local level; the central roleof the LSB in negotiating work reorganization merits space being devotedto it.

Broadly, the basis of bonus payments comprises four elements (althoughthis differs from plant to plant): man hours per tonne, costs, delivery andquality. However, management have also used the local bonus to negotiate

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other priority issues. In the early 1980s, for example, it was tied to manningreduction; by the mid-1980s this had changed to reduced demarcation,then to craft restructuring in the late 1980s and early 1990s and, currently,to the introduction of teamworking (such as at BS Teesside). Thus BSmanagement has sought to trade-off bonus payments against changes inwork organization at a very local level and according to the prioritiespertaining at each plant at any one time. The industrial-relationsand collective-bargaining structure, therefore, has exerted an important'permissive' effect in the introduction of work organization changes. Thelocalized nature of the bargaining, however, is also a factor explaining whythe pace of change has been uneven. The following section examines thenature of work organization changes in more detail.

Restructuring work organization: the principal changes

In both Germany and the UK steel industries the five key elements of workorganization change are: first, a general reduction in demarcation (morerelevant in the UK where demarcation lines between production workersand between non-skilled and skilled grades are more pronounced than inGermany); second, a more explicit commitment towards the multi-skillingof craftsmen; third, a move from traditional forms of gang working toteamworking and, closely associated, a move to merit- rather thanseniority-based promotion lines; fourth, a greater emphasis placed onquality production; and, finally (and arising out of all these featurestogether with the rapid introduction of new technology), a consequentneed for major new training and retraining programmes.

Before discussing these changes, however, several points should benoted. First, the five key elements of change are not mutually exclusive andconsiderable overlap exists between them. Moreover, they are, to a certaindegree, sequential while also being concurrent. Thus teamworking may beextremely difficult to implement before multi-skilling, while multi-skillingobviously cannot occur without considerable training/retraining. Second,union-management agreements may merely be formalizing aspects ofwork organization (such as fiexibility) that already exist on an informalbasis in parts of plants or in certain circumstances (such as night shifts).Finally, the types of work organization change being described here cannotbe introduced quickly and, moreover, are on-going. Nevertheless, thesechanges in work organization are mutually exclusive to the extent thatmanagement has specified programmes for the introduction of each, whichare also clearly prioritized. Therefore, the following provides a briefdescription of these changes, how they are being implemented and whatbarriers exist to implementation.

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Increased functional flexibility through reduced demarcation

In the British steel industry a number of attempts were made in the 1970sto implement greater flexibility. The British Steel Corporation, forexample, entered into agreements with its unions on a number ofoccasions, but there was little monitoring, no retraining and agreements onflexibility did not cross union boundaries. In short, there was little effectiveimplementation (Blyton, 1992). This, however, was to change during thewatershed year of 1980 when, following the national steel strike, there wasa significant reassertion of management prerogative (Blyton, 1992; Mann,1989). Subsequently, management used two major vehicles - the local'Slimline Agreements' and the lump sum bonus (LSB) - to establishbroadened job scopes and a general integration of tasks. Both the SlimlineAgreements and the lump sum bonus negotiations were far more effectivethan previous agreements as vehicles for managerial-inspired change, notonly because of a shift in the power relationship between management andlabour, but also because these agreements applied to all plant workers(manual and non-manual), and thus could encapsulate all areas of work.

The introduction of increased flexibility at British Steel plants wasexemplified by a series of agreements in the early and mid-1980s (Blyton,1992). However, the types of flexibility and the priorization have differedfrom plant to plant. In a number of instances, forms of functional flexibilityhave been introduced coincidentally with the installation of new tech-nology. In these cases BS management has sought to define major newinvestments in what are 'brownfield' locations as essentially 'greenfield'sites for industrial-relations purposes. That is, agreements were sought forworkers in these areas of new technology which were different from thosepertaining elsewhere in the same plant. At BS Llanwern, for example,extreme flexibility exists on the new 'Zodiac' line (a galvanizing line),resulting in fewer than fifty workers continuously operating a £55-millionline. At BS Trostre tinplate works, meanwhile, the introduction of a newcontinuous annealing line in 1986 was also linked by management to theintroduction of new working practices, with one senior operator, threelower-grade operators and one process operator. Such developments nowrepresent role models for working practices to be established elsewhere inindividual plants, as well as being testing grounds for new workingpractices. At BS Trostre, for example, the new working arrangements arenow being spread throughout the plant. The use of the 'greenfield'strategies in 'brownfield' plants should not be underestimated. As onemanager noted: 'Each new technological advance enabled us to push alittle further in breaking down job barriers.'

The trade-union response, meanwhile, has been one of 'new realism',their hands being tied to a large extent by the methods of securing

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agreements: first, through the LSB, whereby there has been a pay-off forimplementation and, second, by management holding 'competitions'for workers to apply for what are seen as secure and better-paid jobs.Where there has been union opposition it has largely been over thequestion of payments, as in the case of craft restructuring described later,rather than questions of the reduction of demarcation per se. The LSB hasbeen a particularly effective vehicle for the introduction of greaterflexibility. The rationale for implementation has also been clear: areduction in manning and, therefore, of costs.

Just as non-skilled workers are now expected to be far more flexible,there is also a noticeable blurring of traditional demarcations between craftand production workers. One of the private British steel producers wroteinto its agreement that any job (including tasks formerly done by craftworkers) which could be learnt with less than twelve hours' training couldbe carried out by non-skilled workers. This was termed 'on the job inter-skilling', with the eventual aim of creating flexible production workers whowould be expected to conduct on-the-job repairs, while craft workerswould carry out more complex work. Similar developments have also beenfound throughout BS plants. While unskilled production workers arefound to be carrying out simple maintenance tasks in both BS and privatesteel plants, the opposite is not true; that is, management has, in the main,not pursued using craft workers in production, largely on cost grounds(exceptions, however, are some of the 'greenfield' investments and theproposed teamworking developments at Teesside).

While functional flexibility between non-skilled workers and at the craft/production interface is increasingly widespread - or at least the agreementsare widespread - there are limits to the extent of flexibility. The first limit isone of competence, though BS and other private producers are investingheavily in training to overcome this. Second, and more insoluble, arephysical limits, such as in the rolling mills where workers are simply too farapart in some cases to be functionally flexible. The third limit concernslimits in the agreements, in that informal flexibility already existed incertain cases before written agreements. In these instances managementhas been unwilling to formalize such flexibility in case workers claimincreased pay for extra recognized tasks.

In contrast to Britain, the notion of demarcation does not exist in theGerman steel industry, at least in the same sense. In part this is due tothe (former) closed-shop structure and the existence of only one union, IGMetall. However, there have been traditional distinctions, based oncompetence and status, between unskilled, semi-skilled and skilledworkers. Unskilled workers acted as hands, carrying out simple auxiliaryjobs; semi-skilled workers were engaged in production work and receivedon-the-job training from foremen or colleagues within the unit promotion

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line; and skilled workers received a vocational training. As such, this lastgroup are usually engaged in maintenance functions and have beenextremely reticent about being integrated into production functions, whichare still the least valued in the internal job valuation system, are the worstpaid and are considered to be the least demanding. There are fewdemarcation problems between the different maintenance functions,beyond competence issues.

Nevertheless, the frontiers between job classifications in the traditionalhierarchy in Germany have become increasingly blurred, as technologicaldevelopments have increased 'skill' requirements and the worker-selectionprocess has become more rigorous over the last decade. The unskilledworker has, for example, all but disappeared. There were attempts inthe 1960s and 1970s towards 'upvaluation' reflecting concerns about thedeficiencies of on-the-job training, compounded by a lack of in-companyhorizontal mobility and the old promotion line system. Basic instructionand systematic formalized learning were introduced, such as the generalsteelworker vocation in 1966 (three years' training, half of which waspractical training). Such measures were largely ineffectual, however,hampered by compromises between immediate production necessities, lowwages and the union striving for status upgrading.

In the 1980s, however, due to the twin developments of technologicalchange and organizational rationalization, pressures for more broadlydefined, systematically trained and more flexible production workersincreased, reflecting the shift from manual work to supervisory and controlfunctions in production. Alongside the reorganization of maintenancefunctions (see below), a new production vocation was introduced in 1986,the process mechanic (Verfahrensmechaniker). This qualification is gainedafter three years' training based not on practical requirements in theworkplace at predefined stations, but on the acquisition of knowledge ofthe whole steel-production process and of skills for quality controland preventive maintenance (hydraulics, pneumatics, measurement andcontrol, electronics and data processing). Only two specialisms areinvolved, a metallurgical one (for the liquid phase) and one in the rollingprocess. This - or a maintenance certificate - is now a requirement for allnew production workers. In addition, many new maintenance workersaccepted production jobs in the 1980s, due to a lack of alternatives.

These twin developments have led to the increasing convergence of theskilled-semi-skilled divide. The high average level of skills in the Germanindustry was seen as an important precondition for functional flexibility.Young production workers are now trained in basic maintenance tasks andolder production workers in certain plants are retrained. In one ofBadische Stahlwerke's plants, for example, 10 per cent of the work-forceare in further training at any one time. Moreover, in nearly all other

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German steel plants ancillary functions (gas or water, materials, etc.) arepartly integrated into the scope of tasks of the production crews.Moreover, despite considerable worker resistance, maintenance crafts arebeing integrated into unit teams. There are, however, indications thatmore comprehensive and flexible functional organization schemes canreduce worker resistance, particularly when wage structures are improved.

Multi-skilling

In general, multi-skilling has proved a fairly nebulous term referring to avariety of scenarios, ranging from what is in effect job enlargement withproduction operatives carrying out a variety of jobs/tasks, to craftsmenbeing trained in a number of different skills. Moreover, as Pollert (1988)has noted, there would seem to be far more rhetoric about multi-skillingthan actual evidence of its widespread existence, which even its mostardent advocates concede (Cross, 1988). For our purposes we will define itas the change from single-trade craftsmen (welder, fitter and turner, etc.)to craftsmen with a knowledge and training in a number of skills. Giventhis definition, it is perhaps not surprising that, in general, there is littleevidence of widespread multi-skilling in the steel industry, not leastbecause of the considerable negotiation which must first take place at amanagement-union level on the introduction of multi-skilling. There is theadded complexity in the UK case of different unions representing differentskilled groups, though this will in future be simplified by the recent mergerof the engineering and electrical workers' unions. Even after thenegotiation period, there is a considerable lag time while new apprentice-ship schemes are designed, with apprentices then having to undergo a four-year training period, and as existing skilled workers are retrained.

The majority of British Steel's plants are currently introducing a formof multi-skilling, termed craft restructuring, although the method ofimplementation differs from plant to plant, as does the response of thetrade unions (which will be returned to later). The basic form of the multi-skilling is a radical change from a traditional plethora of craft grades (therewere over seventy in steel in the 1970s; Mann, 1989), particularly in themechanical-type crafts (e.g., plater, boilermaker, welder). Two newgrades of multi-skilled craftsman are being introduced, a 'mechanical'craftsman and an 'electrical' craftsman (with one of the private steelproducers introducing a third, the 'structural' craftsman which includesplaters and welders). Furthermore, in certain plants at least (e.g., BS PortTalbot), it is intended that there will be overlap between these two: themechanical craftsmen would, for example, be able to undertake simpleelectrical work. However, it is also intended that a centralized pool of 'fire-fighting' specialist craftsmen will be maintained.

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Initial stages of the implementation of multi-skilling have been relativelysmooth at many of the plants. All new craft-worker apprentices at BS PortTalbot, for example, will be apprenticed to one of the two new crafts,mechanical or electrical, while at BS Teesside apprentices have beentrained in such a way since 1986. As such, British Steel may be seen to beimposing a fait accompli on craft unions, forcing restructuring on unions bytraining apprentices in this way. However, gaining the acceptance of theexisting craft workers and unions at plants throughout British Steel has inpractice been more problematic. At three of the major integrated BSworks - Port Talbot, Llanwern and Teesside - there have been protractednegotiations on implementation. At BS Shotton, a craft-restructuringprogramme was initiated in 1988, after which an unsuccessful two-yearnegotiation period took place. The response of BS management to this hasalso differed from plant to plant. At BS Shotton, the craft unions refusedto sign an agreement on multi-skilling and management's response was toimpose an agreement upon them (the agreement was finally signed in early1992). After a long stalemate over negotiations, management at BSLlanwern were also considering such a move but finally negotiated asettlement with the unions. At BS Teesside, meanwhile, after a similarlong period of negotiation, an agreement was finally signed, while at BSPort Talbot, at the time of writing, no agreement has been reached.

The rationale for the introduction of such multi-skilling is several-fold.First, it is argued by management that this restructuring is necessary as partof a general up-skilling of the work-force in response to new technologyand quality demands. Second, there is a management desire to make craftworkers more proactive in the sense of changing their role from amaintenance function to a diagnostic one (i.e., prevention rather thancure). Ultimately this will involve craft workers being integrated more intoline functions, and thus craft restructuring will become intimatelyassociated with the eventual introduction of teamworking. Third, there is adesire to increase overall utilization of craftworkers, which was estimatedat around 65 per cent prior to the implementation of restructuring.

Despite the perceived advantages of multi-skilling there are a number ofbarriers to its implementation. First, there has been trade-union oppositionon some aspects. The main points of contention have been over pay, thenumbers to be retrained and eventual craft manning levels. BS has, forexample, offered financial inducements for retraining, including a lumpsum payment plus a more general upgrading, although this varies fromplant to plant. The exact number being retrained is also contentious,especially in those plants where the overall numbers of craft workers willdiminish following craft restructuring. A further point of contention hassurrounded the forum for the negotiations: at several BS plants manage-ment had wanted to make craft restructuring part of the wider joint

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negotiations but the craft unions insisted, successfully, on negotiationsbeing carried out only between a joint craft negotiating committee andmanagement. Elsewhere, process engineers, who are staff employees,have objected to losing this status as part of craft restructuring and thusa relatively small group of workers have postponed implementation.

The second major barrier to implementation has been the cost ofretraining, in terms of both provision and days lost as a result of retraining.In 1989, for example, over 1000 craftsmen spent thirty days retraining atBS Llanwern. In BS Port Talbot, meanwhile, craft restructuring willinvolve 20,000 days' retraining at a cost of £3 million. This question of thecost of retraining has other side-effects. Management at BS Port Talbotsaw retraining as extremely high risk since it made craft workers far moreattractive in the wider labour market. In the training manager's words'high risk, with Bosch down the road' (a reference to the opening of a newlarge automotive components plant some fifteen miles away). Moreover,the up-skilling of workers meant that employers would have to find ways tomeet skilled workers' broadened career aspirations: the present structuresat BS Port Talbot, for example, will make it difficult to retain workerstrained to HNC level.

The final problem with, rather than barrier to, implementation is thatnot all of the craft workers will have the ability and competence to undergocraft restructuring at BS. BS has undertaken 'skill audits' of craftsmen attheir major plants and is retraining the most able workers initially.However, at one BS plant the training manager commented that out of atotal of 1000 craftsmen, 386 would be retrained initially but that onlya total of 600 were perceived to be capable of undertaking retraining. Asan indication, for example, of the need for higher levels of competency,new apprentices now need a minimum of three grade C GCSE passes,whereas formerly no examination passes were required.

In Germany, as with teamworking, multi-skilling has a longer historythan in the UK steel industry. While multi-skilling has become acceptedlegally since 1987 across industries, with two basic maintenance craftgrades (metals/mechanic and electrical/electronic), the steel industry hashad such a training profile for much longer (as have the mining andchemicals industries), all three industries following the co-determinationphilosophy of 'in vocational training it is better to do too much than toolittle'. A vast national reform was undertaken in Germany in 1987 centredon the metal and electrical vocations. Over forty different metal vocationswere cut to six with sixteen specifications, and nearly forty electricalvocations were cut to four with eight specifications. During the first year ofa three-and-a-half-year vocational education all trainees (mechanical andelectronics) receive the same basic education, with a separation occurringat the end of the second year. Included in the technical innovations of this

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vocational education are two important characteristics, 'autonomousworking' (selbstandiges arbeiten) and 'problem-solving competences'.Moreover, mechanical and electronics trainees have to learn the basicelements of the other field.

In common with Britain, the rationale for this reform is a general needfor a better-trained work-force in response to new technologies and risingquality demands. With new technologies and more data on unit function-ing, the possibilities for preventive maintenance have come to the fore. Forsimilar reasons, it has become possible and feasible to hand over part ofthese functions to the production teams and to reduce maintenance step bystep to relatively small, mobile special task forces, on the one hand, or torepair shops for particularly big or difficult repair tasks, on the other. Butperhaps the most important and most frequently cited reason for this broadand high-quality training is the necessity to equip the craft workers withenough technical and methodical knowledge to cope with the increasinglyrapid technological development. It is this type of qualitative fiexibilitywhich dominates the vocational training philosophy of most big Germanenterprises, particularly those under co-determination, where the unionstraditionally have considerable influence on social items.

Teamworking

Together with multi-skilling (or craft restructuring), teamworking is seenas one of the major end goals of work reorganization in the British andGerman steel industries. As such, the industry is little different fromother industries, particularly the auto industry. Essentially, teamworkinginvolves self-contained groups of workers responsible for all of theactivities in the work area (production, maintenance, etc.). However,teamworking will revolutionize work organization and industrial relationsin the steel industry, which had previously been characterized by small,hierarchically organized work crews which operated on rigid experience-based seniority systems (Blyton, 1992; Bowen, 1976).

To date, teamworking remains a goal rather than a reality within the UKsteel industry. Plans for teamworking are most advanced at BS Teesside,and specifically in the Lackenby 1/10 mill, and at Skinningrove. In therolling mills, for example, work will be broken down into fifteen teams(each comprising three to forty workers), 60 per cent of which will involvecraftsmen who will in turn spend approximately 40 per cent of their time onskilled occupations. Teamworking will, however, lead to a reduction in thework-force (for example, from 490 to 430 at Skinningrove). An indicationof how teamworking will radically alter work organization is that thecurrent 100-plus grades at Lackenby will be reduced to six covering threemain categories: team leader, team worker 1 and team worker 2. However,

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while teamworking is agreed in principle at Teesside and the trainingmodules decided, no implementation has occurred due to disagreementsover pay surrounding these three major grades.

Elsewhere in British Steel, however, craft restructuring has takenprecedence over teamworking, with managers arguing that, first, forteamworking to work effectively, teams will have to include multi-skilledcraftsmen; second, that one major initiative in work reorganization at atime is enough to manage (the training implications of teamworking aresubstantial); and third, that 'hard cash' benefits of teamworking wouldhave to be demonstrated. However, in particular 'greenfield' areas, such asthe BS Llanwern's 'Zodiac' line and the BS Panteg concast line,teamworking principles already operate. Clearly in these areas manage-ment had to retrain workers and the 'new site' notion enabled theintroduction of teamworking. In Panteg's concast, for example, operatorswork on teamworking principles with no craft grade and with each workertrained to carry out all technical work. A four-man crew operates with twogrades of operators and a leading hand. However, the majority of'operators' are ex-craft workers, which is also true on Llanwern's Zodiacline.

While teamworking remains to be developed more widely in BritishSteel, the change from seniority to competence/merit-based promotionamong unskilled workers is a reality in some parts. At BS Panteg, forexample, seniority-based promotion has all but disappeared, although itwas noted that competence tends to increase with experience. At BSTrostre, meanwhile, the main union representing unskilled manualworkers has negotiated a somewhat complex formula for promotion basedon 30 per cent seniority, 30 per cent technical knowledge and 40 percent made up from general efficiency, supervisory skills and general'conscientiousness'. At the large BS Port Talbot works, however, seniorityis still the rule for promotion lines in production. Teamworking, perhapseven. more than the blurring of demarcation lines between craft andproduction workers, poses considerable potential problems for tradeunions, with craft workers being introduced into what have traditionallybeen ISTC seniority lines. Ultimately, it may herald the demise of craftunions in steel plants in Britain and force some sort of merger with themain production union, the ISTC.

The teamworking experiment is further developed in the Germanindustry, although in many ways the old crews also worked as teams in thatunofficially, with the exception of recently recruited workers, eachmember of the crew could substitute for practically every other member inthe case of necessity and for a restricted period of time. However, workerswould refuse management requests for such flexibility. Thus this informal,worker-controlled flexibility acted to maintain worker autonomy and self-

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protection. Moreover, as the promotion line also acted as a permanenttraining crew, workers maintained the responsibility for their own training.However, the systemization, under management control, of the former in-crew on-the-job training (including printed manuals, PC programmes andinteractive videos) led to an 'unveiling of skills' and an expropriation of theworkers' collective knowledge and experience (Franz and Lichte, 1991:34). Again, the rationale for management strategy was not only to achievea shift in power relations, but to increase flexibility and to control thequality of training. Whereas the rigid promotion system gave the unionsconsiderable influence at the shop-floor level and integrated unions intothe production system, the emergence of a technological transformationand radically changed market conditions rendered the seniority line toostable and slow to meet the challenge of radical rapid adaptation tofundamental change. Throughout the German steel industry, therefore,promotion lines were shortened and flattened, in part due to technologicalrationalization, and the functional scope of line members became broader.

To distinguish the new forms of co-operation from the very generalnotion of 'teamwork' the term 'group working' (Gruppenarbeit) has beenintroduced. Group working is a structurally stable way of overcomingformer division of tasks, activities or functions where the major part ofdecision making about how current work has to be organized lies within thegroup. Since there are very different types of work in a steel plant, theremust be, and in fact are, different types of group working. Analytically wedistinguish between unit-related integration (e.g., continuous caster),area-related integration (e.g., secondary treatment, or finishing) andfunctional integration, i.e. across the borders of different functionaltasks or areas (e.g., production/maintenance). The forms are individualmixtures of job enlargement, enrichment and rotation.

All three types of group working now exist in the German steel industry.All enterprises have started at least to experiment. Frequently, new,completely modernized units are taken as the starting point. The reason forthis is that the new technologies involved require different forms ofcommunication and direct co-operation between the workers, includingdifferent, mostly broader and higher skills. For such a unit, for example, asa concast, an annealing line, a coating or galvanizing line, which representhuge investments, management normally selects intelligent, young, well-trained workers who are in most cases carefully trained and prepared fortheir new workplace. This selection process breaks the normal promotion-line rule of seniority and experience. Since the crew on the new unit issmall and shares an extremely high responsibility (e.g., investment perworker at the Hoesch continuous annealing line is £350,000 and stripthroughput is 300 metres per second), it is difficult to distinguish differentgrades of responsibility and a more egalitarian work organization seems to

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be the most logical way to structure work. The most innovative and prolificenterprise seems to be Hoesch Stahl AG. In its three plants at Dortmund,as well as in several other plants outside Dortmund, all three types ofgroup-working organization exist in varying compositions. Nevertheless,these new forms of work organization are not yet the rule in the Germansteel industry; they remain islands in a sea of traditionally structured work.

The most extreme, and best example, of group working in the Germansteel industry is the one which started in 1983 in the cold rolling mills of theHoesch plant Westfalenhutte (Dortmund) (Lichte and Trultzsch, 1986). Ithas not only proved highly efficient and popular with the workers, but hasbeen transferred now to other works, with or without alterationsdepending on the different working conditions. The former promotion linewas made a fully integrated group of equally trained and equally paidworkers of equal status. The group has no foreman; their immediatesuperior is a master who is responsible for several groups. Current work isplanned and executed according to decisions made within the group. Everymember of the group knows how to do the work of every workplace at theunit and has to take over these positions regularly (daily rotation).Everybody in the group receives the same pay which is slightly higher thanthat of the former best-paid first man of the promotion line. In most casesthe groups are smaller than the former unit crews owing to organizationalrationalization (higher flexibility), and in some cases also due to technologi-cal rationalizations that went along with the organization reform. Alongwith group working, an extended participation scheme was introduced.Workers from all three shifts of a unit meet voluntarily every fortnight forself-tuition or to discuss technical, organizational or whatever issues theywant. They themselves choose the issues and elect their moderator who istrained for this task and they can invite experts and superiors to theirmeetings. The works council is permanently invited and receives allmeeting records.

At Hoesch, the works council was not only an active participant, but oneof the initiators of the experiment back in the 1970s. But in general theworks council of other Hoesch plants together with the union initiallyobserved the cold rolling mill project with little enthusiasm, if not opendisagreement. This type of new organization was, and in some cases still is,denounced as 'managerial social techniques', which lead to the intensifi-cation of work and thus serve as a means of more sophisticatedexploitation. But this adverse attitude gradually changed during the 1980sto cautious but principally positive comments, and finally became a part of'qualitative labour policy' which included recommendations to follow thisline of 'de-Taylorization', and is now the general line of IG Metall.

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Trade-union responses to work reorganization

The responses of trade unions to work reorganization in the UK and in theGerman steel industries differ markedly, as organized labour bas acceptedtbe introduction of new work practices or attempted to be involved in theshaping and decision-making process. In the UK there are majordifferences between national union policy and tbe local level (the ISTC isorganized on three levels, national, geographical division and local). Themain production union, the ISTC, has always had a fairly decentralizedpower structure, but the decentralization of bargaining has exacerbatedtbis power shift from the central to the local level. In this respect the lumpsum bonus payment system has been crucial. Not only is a significantminority of the overall pay decided locally, but the nationally agreed payaward cannot be implemented at the plant level until tbe local LSB hasbeen negotiated or agreed to by both parties. Under these circumstancesthe central union body bas become increasingly marginalized. This isexemplified by attitudes toward decentralization of bargaining, with thenational unions arguing against it, but local officials welcoming it (see also,Malloch, 1990). Partly because of this the national union has becomeincreasingly a largely reactive and, in some cases, reactionary force. Thisis exemplified by its attitude to new work practices. The union has noofficial policy towards tbe introduction of new working practices, with theexception of teamworking. In 1988, after pressure for the introduction ofteamworking at individual plants, notably Teesside and Corby, the uniondrew up guidelines for its implementation. All these guidelines sought todo, however, was to maintain the status quo, with, for example, no jobloss, no change to seniority and promotion lines and group leaders to bechosen from ISTC members. The central union, therefore, is marked byinertia and reactiveness. In part this is explained by the diminution of itspower due to further decentralization of bargaining. It is also explained bystretched resources; for example, only one research officer serves theunion, and he combines this post with that of international officer.

Such a situation contrasts with the German one. In Germany, the unionis far better resourced, and more able therefore to adopt proactivestrategies. Moreover, the works council and co-determination systemshave enabled workers to have a far greater voice in the implementation ofwork-organization changes and the introduction of new technology. This isillustrated in the case of the introduction of teamworking at Hoesch Steel,where the union has been centrally involved in all aspects of workorganization, training, etc. An even more striking example from Germanyis the case of Saarstahl Volkingen. Faced by the threat of plant closure, theunion offered a survival plan including craft workers functioning in

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production jobs and ancillary work integrated into production. The unionis now in day-to-day control of work organization.

Elsewhere in the German steel industry workers and unions haveresisted certain aspects of work reorganization. At Piene Salzgitter, forexample, skilled workers were placed in operatives' tasks for one week inthree, an experiment that had to be abandoned due to chronic problems ofabsenteeism of craft workers and a decline in quality standards. Thiscontrasts with the situation at certain UK steel sites: at the privately ownedSheerness Steel, for example, work reorganization such as teamwork andmulti-skilling was simply imposed by managers on workers with no formalnegotiation.

On a broader canvas, however, it would be wrong to imply that thesituation for UK steel unions is desperate while that in Germany is whollypositive. German steel plants have also experienced manpower reductionsand works-council members at plants throughout Germany report pressuresto introduce new forms of work organization. These pressures haveemanated from the general economic climate, from plant management andfrom rank and file members. It is clear, however, that the union inGermany has had more voice in the restructuring process than its UKcounterparts.

Conclusion

The general trajectory of work-organization change in the UK andGerman steel industries has been very similar, with the introduction ofmulti-skilling, greater numerical and functional flexibility, tentative movesto teamworking and an ethos of heightened quality production. The mainreasons for this common trajectory would seem to be technology- andmarket-driven. These changes represent a major break with past traditions,both in their implications for organization (and the impact, for example, onseniority systems) and also in a wider context of changes in collectivebargaining, particularly in the UK. At a broad level, they also representa new form of work organization which is very different from traditionalforms. Moreover, where workers had far more control over the organiz-ation of work (in that it was rigid) and in training (on the job), both arenow increasingly being taken out of their hands and placed into those ofmanagement.

At the same time, however, the pace and pattern of change is extremelyuneven. In part this is not surprising; at the national level, for example,differences between Germany and the UK might be expected. It could alsobe expected between firms. What is more surprising, however, is theuneven pace of change within firms, evidenced for example by the Hoesch

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and British Steel examples. Moreover, this unevenness cannot beexplained away by differences in technology. The BS Port Talbot andLlanwern works, for example, are broadly similar and yet managementhave differing approaches to craft restructuring at the two.

A number of variables may be relevant in explaining these differences(nationality, ownership, size of plant, specific nature of production), buttwo would seem to be pre-eminent: management strategy and trade-unionresponse. The two, of course, are closely related. In the UK, thedecentralization of bargaining, allied with a lack of worker rights, hasmade national and concerted union responses much more problematic.While such forces are less evident in Germany, the issue remains as to howfar works councils are being incorporated in the implementation of newforms of work organization.

Although the traditional role of IG Metall is changing, its continuingrepresentational role is secured by legal rights. In the UK, however, theability of the steel unions to bargain collectively has depended upon theirability to exercise some control over the nature of work primarily throughestablishing job descriptions and demarcations. Given this, increasedflexibility in the steel industry is a direct challenge to the current role of theunions in the workplace. In one private-sector steel plant, Sheerness Steel,the conclusion to the erosion of trade-union control in the workplace is thatthey now face de-recognition. In this case the unions have been unable toforge a new role in the company.

In Germany, where this role is legally enshrined, the development ofHRM techniques has not resulted in direct or indirect challenges to unionrecognition. Consequently the union has been able to exercise somecontrol through the works council over the terms on which newworking practices have been implemented. Correspondingly, although theindustrial-relations system in the UK more closely resembles that ofthe United States, it is the German system of social partnership and thehigher trust relationships that it generates which have enabled a fastertake-up of new forms of work organization in German steel plants.

The productivity gains British Steel has secured throughout the 1980shave in some plants been the result of qualitative improvements inmanager-employee relations, yet in others the unilateral implementationof change by management indicates that the external environment whichhas weakened the workplace role of trade unions has been a moreimportant factor in enabling a greater assertion of management preroga-tive. If the external factors weakening trade-union strength change, thenthe problem of a new workplace role for the UK unions may become amore urgent priority on the management agenda. The resurgence of trade-union action in the German steel industry in the first half of 1992 alsoindicates that the problem of a new role for the unions is likely to affectthe industries in both countries.

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Jonathan MorrisPaul Blyton

Cardiff Business SchoolUniversity of Wales

Nick BaconLoughborough Business School

Loughborough UniversityHanz-Werner Franz

SozialforschungsstelleDortmund

Notes

1 This article was given, in embryonic form, as papers at the Employment Research UnitConference, Cardiff, September 1991 and at the Labour Process Conference. Aston,April 1992. Our thanks to Dr Miguel Martinez Lucio for his detailed comments on thepaper.

2 This research was initially funded by a grant from the British Council/DAAD.Subsequently, the funding for the main comparison has been provided by a grant from theAnglo-German Foundation, for a project titled 'Work Organisation Change in the Britishand German Steel Industries: Implications for Unions and Labour Relations".

3 Despite the unification of Germany, reference to the German steel industry in this articlerefers to the former West Germany.

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