Break or weld? trade union responses to global value chain restructuring

This paper provides a short introduction to this volume, sketching out some of the main dilemmas confronting trade unions in the context of global value chain restructuring, discussing some of the alternative strategies currently being adopted around the world and summarising the contributions to this volume.


Introduction
International trade union solidarity is certainly not a new phenomenon.The phrase 'workers of the world unite' was coined by Flora Tristan (1803-1844) before Marx and Engels made it famous in their 1848 Communist Manifesto, and throughout the 19th century there were instances of European workers taking action in solidarity with their counterparts in other countries.In 1850, for instance, London brewery workers mounted an attack on the Austrian Field Marshall von Haynau in solidarity with workers in Italy and Hungary whose uprisings he had put down.Whilst they claimed that this was for altruistic reasons saying that 'the infliction of tyranny and cruelty in one country is an outrage to all nations' (Press, 1989:26), many actions had an element of self-interest.For instance in the 1859-61 London building workers' strike, the unions engaged in international solidarity action in order to avoid strike-breaking by foreign workers, and this was also a strong motivation behind the setting up of the International Working Men's Association, or First International, in 1864(Press, 1989:28).
This uneasy balance between self-interest and altruism still characterises many aspects of trade union internationalism today, but it is by no means the only balancing act trade unions have to carry out in the 21st century.Another challenge is how to balance the defence of existing workers, including the gains they have made in any particular location, with the recruitment and organisation of new groups of workers.And in recruitment drives, what should the priorities be: to try to win over those workers who occupy strategic positions in the value chain and who can thus can help to win disputes?Or to respond to the needs of the most vulnerable workers who may be crying out for an organisation to represent their interests?Then there is the challenge of how to respond to employers' globalisation initiatives: is it better to resist them altogether, running the risk of being accused of protectionism?Or to go 'with the grain' of globalisation and try to win the best deal possible for the workforce, running the risk of being accused of selling out the interests of those who lose by this process?
Given that the multinational companies increasingly span the traditional divisions between sectors and between national economies, how should trade unions restructure themselves to reflect these new configurations: by sector? by occupational identities? by company?by regional or national groupings?or by their political affiliations?
Other questions relate to the broader political roles of trade unions.How, and to what extent, should they get involved in national and international bodies (exposing themselves to the risk of being accused of co-managing neo-liberal capitalism)?And how, and to what extent, should they get involved in broad-based social campaigns, perhaps in partnership with NGOs (exposing themselves to the risk of being accused of abandoning their duty to prioritise the representation of the direct interests of their members)?
These are some of the questions that are addressed in various ways by contributors to this volume.But before introducing them, it is perhaps appropriate to summarise briefly the reasons why such questions have now become so topical.After nearly three decades when, although globalisation has been increasingly discussed, trade unionism has seemed like an old-fashioned issue, or even an anachronistic relic of 1970s culture, the two terms are now suddenly linked together in a range of political agendas as well as in the specialist industrial relations literature.This new interest is evident in a spate of recent publications, including Beiler, Lindberg & Pillay (2008), Pilch (2007), Schmidt (2007), Moody (2007), Kumar & Schenk (2005), Fege (2005) Fairbrother & Yates (2003) and Jose (2002).

Changing attitudes to globalisation
One recent development that seems likely to have contributed to this new-found interest is a change in public attitudes to globalisation.In the early years of the 21st century, it was possible for consultants like the McKinsey Global Institute (2004), as well as government bodies like the Department of Trade and Industry (2004) in the UK, to argue that globalisation was generally beneficial.Citizens of North America, Europe and the rest of the developed world would, they said, benefit partly because of the lower prices of goods manufactured in developing economies and partly because 'their' multinational companies would increase their competitiveness in global markets, which would ultimately lead to the creation of more jobs back home.In the rest of the world, the flow of foreign investment would generate economic growth, new jobs and rising standards of living.
Public belief in such benign win-win forecasts has been somewhat shaken by recent events, including price rises (especially of food and energy) and the effects of the credit crisis of the summer of 2007.In addition, rapid economic growth in China, India, Russia, Brazil and elsewhere has released huge surpluses which, as they have been reinvested elsewhere in the globe, have made it abundantly clear that the multinational companies formerly based on their soil are not the exclusive national property of the citizens of Europe and North America, however much they might identify with iconic national brands.It is, for instance, a Brazilian company 1 , that now owns Leffe, 1 The company in question is Inbev.See http://www.inbev.comfor further information Stella Artois, Becks, Coors, Jupiter, Skol, Boddingtons and many other 'national' and 'regional' brands of beer -often made on the same production lines.IBM's PC business (arguably the product -with its path-breaking link with Microsoft's software -that did more than any other to create the standards that enabled the 'information economy' to spread so rapidly in the early 1980s) now belongs to a Chinese company 2 .Indian companies 3 own most of Europe's steel industry and even Chelsea Football club, in the UK, belongs to a Russian.Meanwhile, as we go to press, it is announced on the news that two of the best-known British auto brands, Jaguar and Landrover, are being bought from Ford by another Indian company, Tata Motors.
In such a context, any idea that national jobs are safe in the hands of national companies is increasingly difficult to sustain.Faith in the long-term stability of global corporations has taken further knocks from other aspects of the financialisation of capital, in the form of a spate of takeovers of well-known companies by private equity trusts, hedge funds, sovereign-wealth funds (owned by governments in the Middle East, Asia.Scandinavia and elsewhere) and state-owned companies from outside the traditional developed triad of North America, Europe and Japan.Private equity firms now own, for instance, such US household names as Dunkin' Donuts, Hospital Corporation of America, Burger King, Toys "R" Us and Chrysler (Economist, 2008) and, in the UK, the pharmacy chain Boots the Chemist 4 .Takeovers by sovereign wealth funds include those of the shipping company and port operator P & O by DP World, owned by the Government of Dubai, and of various telecom companies by Temasek, owned by the Government of Singapore (Economist, 2008b).These funds increasingly own minority shares in other companies too, For instance QIA, owned by the Government of Qatar, which bid (unsuccessfully) in 2007 for the British Sainsbury supermarket chain, owns a significant part of Cadbury Schweppes (Economist, 2007).Such companies are perceived by the general public as seeking only a quick return on their investments, with no long-term commitment even to the future of the brands they have bought, let alone the workers who produce the products sold under these brand names.
In combination with other factors, including the increasingly evident effects of global climate change, public opinion appears to be becoming more mistrustful both of multinational corporations and of the national and international government bodies that seem to be promoting their interests.

The breakdown of national industrial relations models
In a world in which companies are more and more likely to be foreign-owned, whilst workers are more and more likely to be immigrants, and national governments more and more likely to belong to international trading blocs (such as the EU, NAFTA, Mercosur or ASEAN), the idea that industrial relations systems can be adequately regulated and contained within national borders is becoming increasingly anachronistic.

2
'IBM sells PC Business to China's Lenovo' (Associated Press, December 8th, 2004) 3 Mittal, the Indian-owned steel company, the largest in the world, purchased Arcelor, itself a merger of steel companies based in Luxembourg, Spain and France with subsidiaries worldwide, in June, 2006.Another Indian company,Tata Steel purchased Corus, Europe's second largest steel company, in April, 2007 4 Alliance Boots was the first UK FTSE 100 (the Financial Times list of 100 top UK companies) company to be bought by a private equity fund, Kohlberg Kravis Roberts, in April, 2007 The classic model of an inter-dependent triangular relationship between the state, the trade unions (representing labour) and employers' associations (representing capital) supposed to have characterised what has variously been termed the Fordist period or the 'Golden Age' of capital after the second world war in the West, perhaps never existed in its perfect form but, to the extent that it did, it took distinctively different national forms (Coates, 2000;Hall & Soskice, 2001).In many countries, especially, but not exclusively, in Europe, trade union structures and strategies were shaped by the specific national forms that this relationship took and their own roles in its decision-making processes.Whether or how such structures could or should be dismantled is still an open question in many contexts, although the realisation is growing that they no longer deliver their intended benefits, except, in some cases, to a privileged minority of workers.
Whilst national regulatory regimes continue to make some difference to employment practices between one country and another, there has been considerable convergence over the last three decades, brought about by a combination of factors.These include initiatives from supra-national bodies (such as World Trade Organisation regulations, European Union directives or conditions attached to loans or aid by bodies like the International Monetary Fund or the World Bank).They also include national initiatives, designed to 'modernise' labour markets or attract foreign investment.And of course they include too the actual practices of multinational corporations, either exercised directly, in their capacity as employers, or indirectly, through conditions attached to outsourcing agreements made with their suppliers.
This convergence in employment regimes has not always been matched by convergence on the trade union side.Here, the landscape is marked by considerable diversity both between and within countries.Not only are there varying degrees to which unions are involved in, and committed to, national frameworks of 'social dialogue' , and labour market regulation but there is also an enormous variety in the forms of collective bargaining that take place, which may be at national, sectoral or company level, or take the form of inputs into the processes by which national systems of training, qualifications and occupational descriptions are determined.To this must be added another dimension of heteregeneity -the basis on which trade unions have historically been formed and on which they represent their members in any given national context.These may be craft-based, occupation-based, company-based, sectorbased or based on allegiances to particular regional and/or ethnic and/or political identitities, ideologies or parties.Whilst some are formally allied to, or closely identified with, particular national political parties, others 5 , are closer to social movements,whilst still others remain firmly sectional and non-aligned (Bieler et al, 2008).
It should not be taken for granted that any need for any change will necessarily be recognised when the power positions of existing bureaucrats are well entrenched and the present situation is still producing some positive gains for trade union members.But even if a decision has been taken that a new direction is needed, with such a variety of traditions and models it is by no means obvious what path should be followed.Perhaps more important than any abstract debate about the particular basis on which unions should merge or form alliances with their counterparts in other countries, or with other social or political movements in their own countries, is the reality of who they actually represent at present and what negotiating power, if any, these workers have in reality in the actual locations where they based.Without such power, they are unlikely to win anything.As Ellen Woods points out, even though international alliances between workers' organisations are becoming increasingly important, in order to provide mutual support, whether this is in disputes with companies or states, this means that national states remain crucially important arenas of action, (Woods, 1998:15).
As the need for these alliances becomes clearer, it is to be expected that debates will intensify, both nationally and internationally, about the best way to bring them into being.Such debates cannot be separated from broader questions of which workers trade unions can and should represent, in a context in which trade union membership is declining in most countries, as larger and larger proportions of the workforce fall outside their traditional spheres of influence, because of factors including increases in immigration, informalisation, and the decline of traditionally strongly unionised sectors.

Actual changes in employment on the ground
A third factor that has a direct bearing on the new interest in trade union responses to globalisation is perhaps the most important, although it cannot easily be summarised in a few words in an introductory article like this one.This is the actual impact on employment of the global restructuring currently under way and the impacts of these changes on the structure of labour markets on the one hand, and on the daily experiences of workers on the other.
I have already referred to the growth in informalisation of economies.The informal sector is often thought of as a declining relic of pre-capitalist economic relations but it does, in fact, appear to be a defining feature of the most modern form of these relations.As the financialisation of capital progresses, so too does the pressure on employers to produce dividends for shareholders in the short term and, in a context of increasing global competition, such dividends can often only be produced through downward pressure on the wages and conditions of workers (Altvater & Mahnkopf, 2002).A clothing factory in Morocco, for instance, producing goods for global companies, can only compete effectively with alternative factories in China by casualising its workforce, reducing safety standards and paying below the minimum wage (Belghazi, 2005).Multiplied across the world, such effects of globalisation have contributed considerably to the growth in casual and precarious employment which has presented such a challenge for trade union recruitment.
Precariousness outside the formal economy has grown in parallel with precariousness within it.Even if their work is not actually outsourced to another company or relocated to another country (or both) workers in an increasingly large range of companies and industries live with the daily fear that it might be.As work is reorganised on a project basis or on the basis of outsourced contracts, they may, even though nominally in continuous employment, be required to apply for work within the organisation on a project by project or contract by contract basis and, if repeatedly rejected, find their job security little different from how it would be if they were selfemployed.Solid occupational identities, based on established skills and recognised qualifications (and that often formed the basis of trade union allegiances) are increasingly giving way to provisional identities made up of changing configurations of increasingly universal 'competences' such as proficiency in particular software packages, knowledge of a particular group of customers, or 'communications skills' 'team skills' or 'mindset flexibility' (Huws, 2006).Instead of being able to see their way forward to a job for life, growing numbers of people now have to negotiate labour markets in the constant fear that they will be seen as only as good as their last job.Like the public sector IT workers whose jobs were outsourced to a global company interviewed in the UK by Simone Dahlmann in 2007, their attitude to their work can be summed up as 'keep your head down, ask for nothing' and just 'hope that you will keep your job for another year' (Huws & Dahlmann, 2007).
Although of course it is possible to point to many cases where jobs have disappeared in large numbers as a direct result of offshore outsourcing, the most important and invidious impact of the global relocation of labour does not lie in the quantitative impact on jobs but the qualitative impact -the disciplinary effect on workers of knowing that their jobs could be moved, even if this does not actually happen (Huws, 2006b).
There are, of course, many other ways in which globalisation impacts on employment on the ground, both for those who work directly for multinational companies and those in other sectors of the economy.For the former, they include increasing requirements to speak global languages, adapt to foreign corporate cultures and work to time schedules that are set on the opposite side of the globe.For the latter, they include the many indirect effects of global competition, whether this is on food prices, on natural resources, on the manufacture of the goods, on tourism, or on the environment, and the increasing dominance of local markets by global companies, as well as the effects of new forms of social polarisation, including crime.They also include the effects of migration, both on 'labour exporting' and 'labour importing' regions of the world (Cohen, 2006).

In this volume
This volume aims to add to the literature on trade union responses to globalisation by discussing some of these questions in greater depth.
It begins with an overview by Ronaldo Munck of new forms of labour internationalism in which he argues that trade unions need to 'scale up' their activities beyond the national terrain and that what is needed is a 'transformationalist' alternative that offers labour a multi-layered and flexible response to the new global capitalist order.This is followed by a paper in which Vincent Mosco examines the actual practices of trade unions in the converging North American communications, culture, and information technology sectors and the extent to which trade union efforts to mirror this convergence by consolidating and merging themselves has been successful.He also looks at worker movements that operate in conjunction with, but outside, the formal trade union structure, including one initiative (Washtech) which is discussed in more detail in a later paper (Rodino-Colocino, this volume).He leaves open the question whether the developments he describes portend a rebirth of North American labour activism or represent its last gasps.
The next paper, by Pamela Meil, demonstrates that, despite the increasingly globalising practices of transnational corporations, specific local institutional contexts still make a difference.She does this using case study evidence from Germany, France and the USA which comparing local trade union responses to the same policy initiatives coming from the same corporate headquarters in two major global companies.She concludes that, in all three countries, the traditional trade union negotiating agendas fail to address the most significant changes that are taking place, omitting important areas that are crucially relevant for bargaining 'unoccupied' .This implies the need for a major revision of these negotiating agendas.
Jürgen Kädtler also draws on case study research on the globalisation strategies of companies, in this case those that dominate the German chemicals, pharmaceuticals, auto and tyre industries, to look at the effects of these strategies on trade union bargaining power.He concludes that the local exercise of power by groups of workers with skills on which the company depends can still bring important gains.However this power may well be held by groups that were traditionally poorly unionised, and depends for its success on a number of other factors, including the national industrial relations system and the success with which trade unions have managed to combine with others internationally in European Works Councils or global union committees.On the analogy of football, he argues that types of work fall into three separate 'leagues' .The first-league workers are those whose skills are absolutely essential to the innovation strategies of companies and who thus have considerable bargaining power.Secondleague workers are those who are important to the companies but not indispensible.Their skills are likely to be in somewhat limited supply around the globe so they are likely to be in competition with others of their kind, but only in a few, known, locations and they are likely to remain direct employees of the global companies making it possible for bargaining to take place internationally.Finally, the third-league workers are those whose work has been so standardised that it has become a commodity that can be bought and sold freely on the global market.Theirs are the jobs that are outsourced and subject to the logic of a global race to the bottom and it is dubious whether company-level bargaining can do anything to improve their position.
The next two papers study some of these same developments from a Brazilian perspective.Leonardo Mello e Silva discusses, amongst other issues, the development of international company-based union networks which are now widespread in Brazil and which have been successful in helping build international solidarity in several industries.Marco Aurelio Santana turns a spotlight on the strategies of global auto companies in Brazil, in particular their determination to withdraw from their traditional locations in the so-called ABC region near São Paulo, where workers have developed strong and militant trade union organisation, in favour of green-field sites where they can establish new plants with lower wages and flexibile working conditions on the 'lean production' model.Focusing in particular on the case of Volkswagen, a company also studied by Kädtler, he describes how the local greenfield unions quickly learned from their brown-field colleagues on other sites and set up effective forms of communication and a company-based union network on the model described by Silva.
Silva also discusses another way in which Brazilian unions have been working with the state -by participating in the negotiations over the setting up of the Mercosul 6 Latin American free trade area, in particular how union representatives boosted the social agenda within Mercosul and used this experience to develop their general negotiating skills.
This experience can be compared with that of the South African trade unions whose role in national economic policy negotiations is studied by Marlea Clarke and Carolyn Bassett.Their conclusion is that, faced with the challenge of developing a national policy in the context of neo-liberal globalisation, representatives of the South African labour movement abandoned some of their commitment to a 'high road' , post-Keynesian restructuring vision and agreed to several policy changes that were more in line with a 'low road' , neo-liberal approach, with negative implications for workers in some sectors.
Two further papers, the first by Michelle Rodino-Colocino and the second by Monique Ramioul and Tom de Bruyn, present strongly contrasting -if not antithetical -descriptions of strategies that respond to employers' offshore outsourcing intiatives.The first paper describes, a bottom-up initiative by US workers who developed their own high-tech workers' organisation, WashTech, the Washington Alliance of Technology Workers, to protect their interests in a volatile 'technomadic' labour market.Their actions, which included setting up an 'Offshore Tracker' , in a joint project with the Communication Workers of America trade union, are rooted in an explicit opposition to offshoring which is seen as destroying local jobs, and their agenda can be seen as directly counterposed to, or going 'against the grain' of globalisation.The second paper describes a very different, and more top-down, initiative, involving a group of major trade unions, mostly based in high-wage, economies in Northern and Western Europe, together with UNI, the international trade union confederation of white-collar workers in the private sector.This initiative, a project called Make Offshore Outsourcing Sustainable (MOOS), can be seen as going 'with the grain' of globalisation.' Acting within a European tradition of social dialogue, the unions involved in this initiative argue that globalisation is inevitable but that the effects on workers of failed offshore outsourcing experiments are much worse than those of successful ones.It is therefore in workers' interests that their trade unions actively engage in decision-making about global sourcing at the earliest possible stage in order to ensure that the interests of workers are protected and minimum standards are adopted both at the 'source' location, where the jobs are currently based, and at the 'destination' , to which some will be relocated.The contrast between these two cases illustrates and concretises a number of important debates currently taking place within the trade union movement internationally, raising issues of protectionism versus internationalism; participation in the co-management of capitalism versus opposition to it; 'corporatist' models versus 'liberal' or 'social-democratic' ones; protection of the sectional interests of well-organised workers versus more generalised demands for protection of the vulnerable; and 'what's right?' versus 'what works?' .
The next two papers step outside formal trade union structures and focus on union relationships with unofficial activities, campaigns and Non-Governmental Organisations (NGOs).Bruce Robinson looks analytically at Internet campaigning, labour activism and the remaking of trade union internationalism, drawing attention to the strengths and weaknesses of email campaigns and other uses of information and communications technologies in fostering international solidarity.Patrick Develtere and An Huybrechs focus on what they call 'transnational network movements' in which trade unions participate alongside NGOs and other social actors to bring about improvements in working conditions at a global level.Using the example of the campaign for the abolition of child labour, which led to the ILO ratifying a convention more quickly than at any time in its history, they show how such movements can be remarkably effective in bringing about regulatory change.They conclude, however, that while they can complement more traditional forms of trade union action, they cannot substitute for them.
Finally, this issue ends with a review article by Peter Waterman who draws on his own experience, spanning several decades, in international labour studies, both inside and outside the trade union movement, to reflect on its history and, more particularly, the role played in it by activists and scholars from the UK.Through this personal and sometimes idiosyncratic, but always well-informed, lens he reviews some of the recent crop of publications on trade union responses to globalisation as well as commenting critically on web-based resources in the field.

Conclusions
Globalisation is clearly presenting huge new challenges to trade unions.On the one hand it is loosening the authority and leverage they can bring to bear on national governments, at a time when many of those national governments are themselves becoming increasingly incapable of shaping the forms that employment takes within their borders and the mechanisms by which workers can negotiate with their employers.On the other, it is decimating their traditional constituencies and putting obstacles in the way of recruiting new groups of workers and representing their interests.
In the meanwhile, workers themselves are increasingly connected with each other as separate modules in ever-more complex global value chains which link them to each other both spatially and across the boundaries between companies and sectors in sophisticated outsourcing and cross-ownership arrangements.Often with the same employers, the same labour processes and the same relation to capital, but occupying very different social positions across the world, what forms of interaction between these workers are possible or, indeed, desirable, and by whom?
In the past, technological development has brought contradictory developments for workers.Whether it is steam power, electricity, the telephone or the computer, each technology can be seen as having eliminated and deskilled some jobs whilst also creating new ones.And whilst it may have destroyed some aspects of traditional life it has put new resources into the hands of the general population which can be put to new uses.The very technologies that can be said to be degrading some aspects of working life can also, in other words, be seen as liberating.It seems likely that much the same may be said by future historians about the present phase of global value chain restructuring, which has been partially enabled by technological change.
Could the chains that link workers ultimately become a means for the stronger to haul the weaker up towards their level, rather than a means for dragging them down to the depths?In the shorter term, as the papers in this volume show, no consensus has