Holzmann Workers Accept Consessions
BERLIN (AP) _ Workers at Philipp Holzmann AG agreed on concessions to help the troubled construction company but the European Union’s competition watchdog warned Friday that the German government should hold off on assistance for the company until the EU reviews the plans.
``It is absolutely essential that no state aid is given before it is authorized _ if it is authorized _ by the European Commission,″ European Union Competition Commissioner Mario Monti said after two days of meetings with German officials, including Chancellor Gerhard Schroeder and Finance Minister Hans Eichel.
Holzmann teetered on the brink of declaring insolvency last month after revealing losses of $1.3 billion, but Schroeder persuaded creditors to sign on to the plan by offering $129 million in loans and guarantees.
About 3,000 jobs of the 17,000 in Germany are also to be slashed under the plan.
Labor officials meeting with company executives said Friday that they had come to an agreement late Thursday over cuts of $126 million in personnel costs.
Employees will accept wage cuts of up to 6 percent for the next 18 months, said Michael Ernst, Holzmann’s head of personnel. In addition, they may have to work up to 17 hours overtime a month for deferred payment.
Other benefits, such as individual performance bonuses, also will be cut, Ernst said.
Ernst said the IG Bau construction union supports the agreement, and labor leaders say they expect workers to approve of the plan without significant opposition. The agreement requires amendment of labor contracts.
Monti said there were new EU guidelines that allow for approving the government’s involvement in the Holzmann bailout, and that the plan could get the EU’s blessing if it falls under those rules.
The government intervention must restore the company’s long-term viability, involve a sector characterized by over-capacity and be carried out with company owners’ participation, Monti said.