Abstract
European economy suffers of high unemployment and welfare costs loom large.
The necessity of taking actions arose. One of them is widely discussed as the introduction of the 35-hours week in European economies. Due to the influence of major economic and social changes, traditional structures are started to be set off.
In the fight for market shares, to positioning themselves on the world markets, and to enhance productivity, performance and competitiveness, changes in the European economic thinking process have to be triggered – action plans need to be developed.
I chose the Volkswagen AG to give an example, how a model (cutting weekly working-hours and wage-rates likewise) is already working.
VW followed through a concept without detours and without getting back hidden benefits by keeping open back doors. They demonstrated, how an even bigger step than the one above is to be realized. They passed all pros´ and cons´, on which other German companies and European Countries could not agree upon by realizing a competitive model.
This paper should give an impression of the effect of such a launch on employment, output, wage rates, techniques and technological progress.
Table of Contents
THE 35-HOURS WEEK
Management consultancies counterargumented
„VOLKSWAGEN“
VOLKSWAGENS´„4 DAYS´-WEEK“ OR 28.8 HOURS/WEEK MODEL
EFFECTS ON EMPLOYMENT AND WAGE RATES
EFFECTS FOR THE EMPLOYEES
EFFECTS ON OUTPUT, TECHNIQUES AND TECHNOLOGICAL PROCESS
CONCLUSION
LITERATURE
EXHIBIT 1.1 - 7
Objectives and Core Themes
This term paper examines the economic implications of introducing a 35-hour workweek in European economies, using the Volkswagen AG case study to analyze the impact on employment, labor costs, and corporate flexibility. The central research objective is to determine how reduced working hours can be implemented without compromising productivity or corporate competitiveness.
- Impact of reduced working hours on employment levels and wage rates.
- The effectiveness of corporate flexibility and "breathing enterprise" models.
- Comparative analysis of European labor market rigidities versus US dynamics.
- Strategies for achieving a "win-win" scenario for both employers and employees.
- The role of technological progress in maintaining production efficiency.
Excerpt from the Book
„VOLKSWAGEN“
I chose the Volkswagen AG to give an example, how a model (cutting weekly working-hours and wage-rates likewise) is already working.
VW followed through its concept without detours and without getting back hidden benefits by keeping open back doors (see page 3). They demonstrated, how an even bigger step than the one actually discussed is to be realised.
They passed all pros´ and cons´, on which other German companies and European Countries could not agree upon by realising a competitive model.
By its 5 years forcast and plan in the early 90s for production, marketing and facing competition, it turned out, that the efficiency conditions of VW could not fit any more a successful presence at the world market. The cost of labor could not be equalized any more by productivity and output. VW had to reorganize its production process, which meant laying off personnel on the cost of investments on the production side.
Succeeding the traditional way of leading an enterprise would have meant that 20% of the employees were endangered to be dismissed or huge amounts of subsidies necessary to rescue job security.
Summary of Chapters
THE 35-HOURS WEEK: Discusses the necessity of structural reforms in European economies to combat high unemployment and maintain competitiveness against global powers like the US.
Management consultancies counterargumented: Outlines the criticism regarding the 35-hour workweek, noting that subsidies are often inefficient and that firms may evade the law or suffer from performance-related wage complexities.
„VOLKSWAGEN“: Introduces Volkswagen AG as a successful case study for implementing flexible working-hour models to prevent mass layoffs.
VOLKSWAGENS´„4 DAYS´-WEEK“ OR 28.8 HOURS/WEEK MODEL: Details the specific management strategies VW used to reorganize production processes and address labor costs during the 90s.
EFFECTS ON EMPLOYMENT AND WAGE RATES: Analyzes the transition in equilibrium from high-cost structures to a new model that avoids 20% workforce reductions through wage adjustments.
EFFECTS FOR THE EMPLOYEES: Explores employee acceptance, showing that despite wage cuts, job security and increased leisure time lead to overall contentment among the majority of the workforce.
EFFECTS ON OUTPUT, TECHNIQUES AND TECHNOLOGICAL PROCESS: Describes how the 4-day model helped maintain local production while simultaneously increasing production time and corporate flexibility.
CONCLUSION: Summarizes that the VW model is not universally applicable but demonstrates the need for flexibility and shared responsibility between unions and employers to survive global competition.
Keywords
35-hour workweek, Volkswagen, labor market, employment policy, working hours, production efficiency, wage compensation, competitive model, corporate flexibility, economic reform, unemployment, labor costs, productivity, shift work, industrial relations.
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on the economic and social effects of reducing weekly working hours, specifically evaluating if such measures stimulate technological progress and maintain corporate competitiveness.
What are the central themes discussed?
Key themes include labor market rigidity, the "breathing enterprise" concept, wage-compensation models, and the tension between social standards and economic efficiency.
What is the core research question?
The paper asks how legislation for shorter working weeks impacts employment, output, and technological progress, and whether these measures effectively prevent mass unemployment.
Which methodology is used?
The author uses a case study methodology, focusing on Volkswagen AG's implementation of the 28.8-hour workweek model compared to traditional economic standards.
What is the main topic of the middle section?
The middle section details the practical implementation of the 4-day workweek at VW, including the specific shift programs and how they balance performance with job security.
How are the results of the research characterized?
The results are defined by the transition from rigid production structures to flexible, "win-win" scenarios that prioritize long-term survival over short-term rigid wage expectations.
How did Volkswagen avoid mass layoffs in the 90s?
VW implemented a model that reduced individual working hours and wages while simultaneously extending overall production time, ensuring that the company remained competitive without needing to dismiss 20% of its staff.
What was the employee reaction to the new model?
Based on opinion polls, the majority of employees were contented with the new model, primarily valuing the increased certainty of employment and more leisure time despite the wage cuts.
What role does the "Allgaier Werke" play in the conclusion?
The company serves as an additional example of the industry's need for multiple, flexible working models to respond to changing global competition and union policies.
- Arbeit zitieren
- Mag. Art., MBA Hannah Schwanzer (Autor:in), 1999, The introduction of the so called 35-hours-week in EU countries, München, GRIN Verlag, https://www.hausarbeiten.de/document/70698
