Multinationals from the BRIC-countries investing in German firms : impacts on industrial relations

Often, investments from emerging economies in firms in industrialized countries evoke concerns among the employees in the targeted firms. Many of them are afraid of losing their jobs, or fear that the new owners could undermine existing social standards. Up to now, little is known about how such investments affect industrial relations in targeted countries. Using the example of investments from the BRIC-countries (Brazil, Russia, India and China) in German firms, this paper analyses whether employees’ fears are well founded. To this end, four different factors are considered. These include: (1) the situation of the target firms in the run-up to an acquisition and the employees’ reactions to the takeover, (2) the investors’ knowledge of the current system of industrial relations, (3) the day-to day interactions with the new owners, and (4) the patterns of communication between works council representatives and the new owners. The empirical part of the article is based on an analysis of quantitative data as well as the application of problem-centered interviews with members of work councils, trade union representatives as well as managers.