Subject:
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LEGO(R) workers opt for pragmatism as they brace for more lay-offs
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Newsgroups:
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lugnet.general, lugnet.mediawatch
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Date:
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Tue, 1 Jul 2008 09:09:36 GMT
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Viewed:
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460 times
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BILLUND, Denmark (AFP) July 1,2008 AP - Cloned by the thousands, Harrison Ford’s
head bobs rhythmically along the conveyor belt at LEGO main factory in Denmark,
representing hope that the colourful toy brick-maker will not move all of its
production abroad.
With the launch of its new toy, inspired by the latest Indiana Jones movie, the
world’s fifth largest toy-maker has managed to reassure at least some of its
Danish employees they still have a future with the company, which has
increasingly been moving jobs to countries where labor is cheaper.
“They say Indiana Jones never dies,” said Charlotte Bueland as she
single-handedly monitored five massive machines in the ultra-modern factory
building.
“Let’s just hope that is also the case for LEGO at Billund,” the western Danish
town where the iconic toy maker is headquartered.
Facing harsh competition, the Danish toy-maker has in recent years relocated
many Denmark-based jobs to countries where salaries are far lower. But Billund
employees have so far refrained from demonstrations or strikes. Compelled by
global market conditions, they have instead taken a pragmatic approach and opted
to negotiate with management for better conditions for those who are forced to
leave and those who remain behind.
“Relocations are inevitable in the short term because we cannot compete with
countries where the salaries are low,” acknowledged Brian Lyst, who heads up the
local branch of the powerful 3F union.
Family company LEGO, whose name comes from the first two letters of the Danish
words “Leg godt” or “play well” in English, was founded before the invention of
the famous block, by Ole Kristiansen in 1932. When the firm launched its
colourful plastic bricks in 1958, they quickly rocketed to planetary success.
A half-century later more than 400 million children and adults play with the
bricks each year, spending five billion hours annually putting them together and
pulling them apart. At the end of the 1990s however, LEGO experienced a severe
crisis as fierce competition from interactive electronic and computer games
brought the Danish company to its knees for the first time in its history. The
company had diversified into theme parks and branded products, including
clothing, books, watches and multimedia games, but reported millions of dollars
(euros) in losses in 1998, 2000, 2003 and 2004.
Following a harsh restructuring, including massive lay-offs, the closure of
production sites and a refocusing on the core-business of building blocks, LEGO
in 2006 managed to scramble back into the black. It was a drastically changed
company that emerged from the crisis.
LEGO Billund plant’s production unit, which in the 1980s counted some 2,500
employees, today has only about 1,000 workers to keep the wheels in motion, and
by 2012, only 300 to 400 are scheduled to remain. The Danish plant does not
however risk disappearing altogether, according to LEGO Group (CEO)president
Joergen Vig Knudstorp, who took over the helm in 2004 and has been largely
credited with rescuing the company.
“Billund will in the future be maintained as a strategic base housing the
(company’s) greatest expertise within research and product development,” he told
AFP. He admitted however that the plant will in the future count only 20 percent
of LEGO employees, down from 45 percent today.
“We will continue relocating and developing expertise abroad as we continue to
reduce our costs in an increasingly competitive market,” he said. Such
statements make employee representative Berit Flindt Pedersen worry about
Billund’s future.
Salaries can be 10 times lower
“We know that there will be fewer and fewer employees here,” she said. She said
she would never forget “that black day in June 2006 when the management
announced they would cut 900 jobs over the period of three to four years, and
move them to the Czech Republic,” where salaries can be 10 times lower than in
Denmark.
But even as Danish jobs have been moved to the Czech Republic, Hungary, Poland
and Mexico, Billund’s workers have launched no mass protests or strikes, instead
contenting themselves with the extra perks their unions have been able to obtain
from management.
They have for instance secured a “loyalty bonus” of 16 kroner extra an hour
through June 30, 2009 as management scrambles to keep spooked employees from
deserting the company before their jobs have been moved.
A small building at Billund called Fremtidshuset, or House of the Future, is not
a workshop for building futuristic LEGO toys, but instead a workshop opened in a
joint management-union effort in 2006 to help employees affected by the
lay-offs, offering them training and counseling on other job opportunities.
“We help those who have been laid off by training them for other jobs, and those
who have not by helping them increase their skill-level so they can hold onto
their job,” said head of Fremtidshuset Villy Markman, who has worked for LEGO
for 33 years.
Union representative Lyst agreed with this approach to the crisis and called for
the rights afforded Danish LEGO workers to be moved along with their jobs when
they are transferred abroad.
“The most important thing is to make sure the working conditions are acceptable
wherever LEGO toys are made and that the social dialogue with LEGO is also
transferred abroad,” he said.
http://business.iafrica.com/worldnews/1005641.htm iafrica.com business
http://au.biz.yahoo.com/080701/33/1tabn.html yahoo.com business
-end of report-
(Billerud/Billund)
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