reactionary movement Populism infiltrates German companies as workers resist gender quotas

In Germany, workers have a greater say in corporate decisions. For multinationals like Daimler and SAP, this is exposing the same social divisions as the rise of the populist parties in politics.
More Diversity? Two women on the executive board is enough.

It's one of the many things that is unique to corporate Germany: Employees have a right to co-determination. Before plant managers make a key decision, they have to consult what is known as a works council, whose  members are elected by the plant's employees. It's a bit like a labor union, except that union representatives have to stand for election to the council just like anybody else. If a plant's workers are unhappy with the union, they can vote in somebody else.

This democratic process is starting to cause a major headache for some of Germany’s leading multinationals. Carmaker Daimler, software giant SAP and engineering firm Thyssen-Krupp are experiencing a strong showing by populist candidates in elections to these powerful works councils.

The presence of these reactionary currents in German companies mirrors the rise of far-right parties in many countries, including the rise of the Alternative for Germany (AfD) in German politics. The populist party catapulted itself into parliament last fall and became the biggest opposition group when the country's two biggest parties entered a governing coalition.

While the mainstream in Germany adheres to traditional liberal values, populists showing signs of xenophobia, sexism and homophobia have gone from being marginal voices to becoming increasingly vocal throughout society. In German business, this has taken the form of resistance to recruitment efforts to increase the participation of women and minorities in the workforce and in top management. The debate reflects many of the same tensions as the one over affirmative action in the United States.

In a works council election earlier this month at the sprawling Mercedes factory outside Stuttgart, the “Liste Zentrum” of populist candidates won 13.2 percent of the vote, increasing its representation on the 47-member council to six from four. That share of the vote approximated the 12.6 percent that AfD won nationally in the parliamentary elections last September. The IG Metall labor union, which has traditionally represented workers and won 37 of the seats at Mercedes, distanced itself from these radical candidates and their goals. Daimler management said it was watching the situation closely to make sure tolerance prevails in the workplace.

SAP is holding a works council vote this week at its huge headquarters campus in Walldorf, in southwestern Germany. Two lists of candidates are openly challenging the commitment of unions and management to encourage diversity in the global software giant, which employs more than 90,000 people in 130 countries. “Is it really such a great argument to be a woman when it’s about software?” the “Fresh Wind” faction asked rhetorically in an online newsletter ahead of the election. It added: “Gender debate to and fro, the fact is every man and every woman is responsible for themselves – in professional as well as private life.”

The candidates argue that any program which gives priority in hiring to women or other minorities automatically discriminates against heterosexual men. Since 2015, Germany has required companies to set goals toward appointing 30 percent women to senior management positions. The latest coalition has proposed stiffer financial penalties for companies that don't comply. “We reject any quotas and targets,” wrote the leader of one works council list in a January blog, demanding positions be filled on merit alone.

26 p07 Women in boards and executive boards-01

So far, the impact of such rebellious lists has been limited. Klaus Dörre, a sociologist, says right-wing groups have lacked the organization to pull off a major victory, but he warned that each success creates an infrastructure that can support the goals of populist groups like the AfD. Existing unions could also be pushed to the extremes to maintain their support base – similar to political primaries in the United States.

There is a certain irony in SAP becoming the focus of this debate. The company's chief executive, Bill McDermott, has been outspoken in his support of diversity, though its executive board has only two women who were added last year. The CEO praised the “unique magic of every single individual” at San Francisco’s Pride Parade in 2016 to show that SAP was open to everyone regardless of sexual orientation. The company's co-founder, Hasso Plattner, who remains non-executive board chair, has also made equality of opportunity for women a focus of an engineering institute he sponsors at the University of Potsdam.

Still, the fracas is dangerous for SAP because it may tarnish the company’s reputation as it faces a more competitive international environment for recruitment. These days, the company is vying not only with Silicon Valley tech firms but also with the likes of Volkswagen and Siemens for IT employees.

US companies may not have works councils, but that hasn't stopped them from being pulled into partisan political debates. Silicon Valley has also seen its share of controversy, most recently with allegations of sexism, harassment, and other forms of discrimination. Google fired software developer James Damore for objecting to the promotion of women on the grounds that they were less capable than men, but then came under fire for infringing freedom of speech. In the US as well as Germany, it is safe to say that women continue to be underrepresented in IT.

Christof Kerkmann covers technology for Handelsblatt and Martin Murphy specializes in automotive coverage. Darrell Delamaide is a writer and editor for Handelsblatt Global in Washington, DC. Christopher Cermak of Handelsblatt Global contributed to this story.To contact the authors; [email protected], [email protected], and [email protected].