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German Workers' Rights Board Condemns Continental AG

Exploiting Workers Worldwide

Continental has a well-documented history of exploiting workers. Continental was one of among 250 German companies which used forced labor during World War II. Altogether, an estimated 12 million people, mostly East Europeans, were forced to work as slaves or low-wage laborers under the Nazis. In the late 1990’s Jewish advocacy organization demanding reparations for unpaid labor during the Nazi era filed over 40 lawsuits against German companies. Continental AG was named a defendant in two of these cases.

Faced with its historic moral and ethical responsibilities, Continental joined the Foundation Initiative of German Industry which coordinated the reparations. In July of 2000, the “Remembrance, Responsibility, and the Future” Foundation was finalized after details regarding the size of the fund, the allocation of monies, and the assurance of legal peace for German companies were agreed upon. The foundation would be funded to the tune of 10 billion Deutsch Marks, DM 5 billion from the German government and DM 5 billion from German corporations. Continental is listed as having contributed to the fund but their exact size of their contribution is unknown.

But to return to the present, Continental’s program of corporate globalization is not just costing American workers their jobs. CTNA’s parent company, Continental AG has long been shifting tire production from Germany to low cost, low labor standard countries in Eastern Europe and Asia.

While Continental’s actions are truly unconscionable it cannot be said that they are unprecedented or unexpected. For years, American workers have been ravaged by radical anti-worker trade policies. Trade agreements like NAFTA, CAFTA, and the FTAA have opened the door for companies like Continental to leave the United States in search of the cheapest wages and the weakest labor standards. In this global race to the bottom, it’s clear that workers everywhere are losing.

Once in these lower cost countries, Continental continues to ignore labor laws in this effort to cut labor costs. Continental illegally shut down the Euzkadi plant in El Salto near Guadjalajara, Mexico in December 2001. Over 1,100 workers were unlawfully fired. A three-year long strike and an international campaign against the unilateral, arbitrary and illegal closing of their factory were endured by the workers as they sought justice. For a long time the corporation attempted to deny its breach of law but it was too apparent to be covered up. Several Mexican court decisions agreed with the union. However, Continental used loopholes in Mexican legislation to play for time.  In the long run, the damage done to its corporate image on the European market and the fear of further damage was what moved the management of Continental from an uncompromising to a cooperative attitude.

In the end Continental accepted a solution which met the most important demands made by the labor union: After more than three years on strike, the Euzkadi plant was reopened and 600 workers returned to their jobs. Moreover, in addition to the legal settlement the workers received 50 percent of the Euzkadi plant capital representing a value of about $40 Million US. In effect Continental thereby compensated the largest part of three years’ unpaid salaries. The other half was taken over by a Mexican automobile components supplier, who has become a competitor rather than customer of Continental.

At Continental’s production facility in San Luis Potosi, Mexico the company violated its labor agreement by trying to enact a 30% pay reduction under the guise of corporate restructuring. When union activists from the National Union of Workers of General Tire of Mexico (SNTGTM) spoke out in opposition, Continental illegally fired them. Mexican courts ordered that the four fired union leaders be reinstated.  This, however, was only after the union was forced into a three year legal struggle, plagued by the company’s appeals and delays. Currently the workers in San Luis Potosi have their jobs back but have not yet settled their labor dispute with Continental.

2/15/07 Press Release from SNTGTM English Spanish

Declaration of San Luis Potosi

Global Solidarity Flyer

OECD Compliant