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«The appearance of multinational companies in Hungary has, in general, been greeted positively by public opinion. However, some professionals dealing ...»

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Here the interest representatives announced that the negotiations had been totally unsuccessful, but in spite of this they did not call a strike, postponing this step for an indefinite period. According to the trade union, Malev wanted to use the wage dispute and the Employment Relations in Multinational Companies 273 strike to break up the contract with Aeroplex. Malev brought in English mechanics, and on 23 August announced that if the trade union (RMFSZ) did not withdraw its strike threat by midnight, then Malev would ignore all wage proposals made so far. In reply —the seven days having passed - on 24th August at 6 pm the ACE workers ceased work and declared that their wage demand for the year was 50 per cent, and that the wage rise for 1994 would be left open. The negotiations of 25 and 26 August did not produce any results and the strike proceeded with almost 100 per cent support.

Yet on 27 August the ACE workers suspended the strike for an indefinite period because they did not want to be held responsible for the inadequate condition of Malev aircraft, or for any accidents which might occur because of such inadequacy. Prior to this the Transport Workers International Federation labelled the employ­ ment of English mechanics as serious strike breaking, and MSZOSZ and the Federation of Workers Councils criticized the employers’ actions in similar fashion.

The strike and especially the strong support of the trade union federations for the action put pressure on the Malev management to change the negative attitude it had shown in earlier talks and so the trade union achieved its main purpose in the follow-up negotiations

- that is the ability to take part in decisions affecting the company.

After this, strong skirmishing took place for four days concerning the level of wage rises, which finally resulted in the trade union accepting a wage offer of 34.6 per cent. This amount was well below their original expectations, but knowing the financial situation of Malev, Lockheed and Aeroplex, they realized that this was the maximum increase possible.

Lessons from the Strike Many lessons can be learned from the conflicts that originated in connection with the talks between the management, employees and the trade union representatives of the latter. Among these, and from our point of view the most important, is that the disputes could have been averted at the time the joint venture was established, had the trade unions been treated as partners.

Additionally, there were many arguments inside and outside the company - indeed, even within Lockheed itself - which were against the planned structure of the joint venture company. The strike of the Aeroplex workers showed that there were serious professional and financial problems with the contract between Malev and Lockheed concerning the establishment of Aeroplex. And one of the most significant results of the strike was that, with a clearer articulation of interests, the combatants on the different sides of the Industrial Transformation in Europe barricade woke up to the fact that there was one single possibility

for finding a common interest:

In the past few days everything has come together: the wage question, the grievances connected with the reorganization of a year ago, the uncertainty and fear attached to the future, and the most important thing

- the almost complete lack of information and the ignoring of a succession of opinions from the em ployees. Perhaps the real result of these events is that we cannot make progress without understanding each other. Therefore we need to talk about things, to negotiate, to listen to each other’s opinions, and to take stock of the situation before difficult situations emerge. (Aircraft mechanic, leader of the RMFSZ trade union, in Legikdzlekedes, 21 September 1993: 2) A further significant aspect of the strike concerns relations between different groups of workers and unions at Malev. Before the maintenance workers’ dispute flared up, the Malev pilots held a warning strike for nearly two hours in support of their wage demands on 11 June 1993. The pilots’ aim was to achieve wage proportions between the different groups of workers which approached the international average. From many points of view this strike set a precedent which stirred the aircraft mechanics.

Although there were plenty of common causes in the background of the two strikes, the essential difference was that the pilots managed to get all the workers of the company behind them, as well as the various differentiated confederations of interest representation groups, who earlier had been rivals.

In contrast, the primary aim of the trade union of the aircraft mechanics was to gain political support and the support of relevant national confederations, rather than a strengthening of joint action

of local organizations. The mechanics emphasized the following:

We were unable to acquire political support through the League; the parties involved were afraid - probably due to the approaching election that the strike would lead to a nationwide transport strike. By the end of the negotiations it had become clear: every day of the recent strike would have significantly increased Malev’s losses, and would have resulted in redundancies at Malev and Aeroplex. There was not one trade union which could accept this, because they also had to think about the fact that, som ehow, the employees would always end up paying for these losses. This is why we have to come to an agreement without a strike.

(Spokesman o f the Aircraft Technicians Independent Trade Union (RM FSZ), in N epszabadsag, 14 September 1993: 5) Opposition to the use of strike breakers enabled the RMFSZ to gain the support of the two biggest influential trade union confeder­ ations, and this helped them considerably in achieving their aims.

At the same time the company-level trade unions and especially the company’s other workers did not show any support or sympathy.

Employment Relations in Multinational Companies 275 Indeed, there was a certain antipathy towards the strike movement, in that a significant number of the airline company’s employees felt that the aircraft mechanics’ wage demands were exaggerated.

It would probably have produced better results for the employees if the aircraft mechanics’ trade union had joined forces with the pilots in pressing their wage demands: if they had not obtained the wage rise then, they could have stopped working. They had asked for a 200 per cent rise, although they had no chance of achieving it;

yet Malev workers, especially the pilots, gained sympathy - even though because of the strike their wages decreased. The leaders of Lockheed and Malev stated in Brussels, in March 1994, that they would act to resolve the problems of the joint venture. In the negotiations both sides strengthened their support for Aeroplex and were determined to achieve appropriate growth. It was also because of this that there were talks about the by now controversial contract.

Mutual concerns were given greater emphasis, and these common aims all stressed the priority of gradually realizing the aims of Malev.

Conclusions These two cases show how institutional legacies can have a strong impact on labour relations in foreign-owned enterprises and joint ventures in Hungary, and, by extension, other former state socialist societies. Even in the ‘greenfield’ situation at Suzuki, the trade unions have been able to attract considerable support from the managerially carefully selected workforce and seem likely to domi­ nate the works council, as indeed is common throughout Hungary.

Earlier patterns of interest representation and cooperation between unions and management remain highly influential and the desire for collective involvement in the affairs of companies seems to be a central value for many Hungarian workers. Multinational firms cannot easily impose their own preferred management style and system of employment relations without taking these patterns and values into account.

A further important point which arises from this discussion concerns the relations between different unions at the enterprise and national levels, and the recourse to political support in wage and representation disputes. The fragmentation of the trade unions considerably weakened the power of the mechanics in the Aeroplex case, and they were unable to gain the support of other workers in Malev. However, the use of strike breakers enabled them to mobilize national federation support which was critical in changing manage­ m ent’s approach, and which had been lacking earlier. The growing Industrial Transformation in Europe influence of the former socialist trade union federation will probably limit the effects of fragmentation - at least in the larger firms - and increase the significance of labour organizations, but the extent to which national unions will be integrated with and control enterpriselevel unions remains unclear. Relatedly, the links between this federation and the socialist party currently in power in Hungary may weaken its support at the local level, as has occurred in Poland (see Chapter 8).


Mako, Csaba (1993) From Centralized Corporatism into D ivided Unionism. Vienna:

Institute for Advanced Studies.

Neumann, Laszlo (1993) ‘The Hungarian Suzuki C o.’, paper presented at OECD Seminar on Labour-M anagement Relations, Budapest, 14-15 June.

OECD Seminar (1993) O ECD Seminar on Labour-M anagement Relations,

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