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But not only international law or internal company codes of conduct oblige VW
to respect fundamental labor norms. In addition Brazilian law, according to article 9
of the Brazilian Constitution, there is the obligation not to hinder the right to strike. 216
The pressure of Unions and Brazilian Labor courts, which insisted on abidance by
the law, finally led to an agreement between the union and the corporation, which
was supported by 75 percent of the 13,000 employees from the plant in question, to
cut 1,923 jobs in exchange for severance payments. 217 – This unfavorable interlude,
with respect to shareholder value (see the consolidated balance sheet), will surely
play an important role, in terms of the global bargaining power for investment locations
and advantages and disadvantages of locations in the next corporate decisions
of the Wolfsburg board of directors: in other countries abroad this “disadvantage of
location” concerning labor laws and the degree of union organization would not exist.
German companies were only marginally involved in the privatizations of former
state enterprises in Brazil during the nineties. Other European corporations, led by
Spanish companies, were large-scale participants of this wave of privatizations,
which occurred as a result of the IMF conditions placed on Brazil, one of their major
debtors. The share of foreign capital among the Top-500 Brazilian firms rose from
31 percent in 1991 to 45.8 percent in 2001. 218 At the same time as a consequence
of privatizations of state enterprises the state’s participation in the top-500 Brazilian
companies fell from 26.6 to 19.7 percent.
The countries of origin of the FDI inflows in the case of privatizations were the
U.S.A. (16,5%), Spain (14,9%), Portugal (5,7%) and Italy (3,1%). 219 From the perspective
of the countries of origin, Portugal maintains the top position with respect
to the relative importance of its investment in Brazil: Portugal’s FDI flows to Brazil
amounted to 15 billion US-dollars over the last 5 years, accounting for approximately
60% of Portuguese FDI –outflows, 220 a circumstance which might refer to the strong
mutual dependency between Brazil and Portugal.
The European FDI stock in Brazil amounted to 76.8 billion Euros in 2001. 221
Before the big wave of privatization in the middle of the nineties the capital and
production intense automobile sector was leading in foreign investment, until the
216 “Art.9.: É assegurado o direito de greve, competindo aos trabalhadores decidir sobre a oportunidade de exercê-lo
e sobre os interesses que devam por meio dele defender.” CONSTITUIÇÃO DA REPÚBLICA FEDERATIVA DO
BRASIL. Translation: “Article 9: The right to strike is guaranteed, it being the competence of the workers to decide
on the advisability of exercising it and on the interests to be defended thereby.”
217 http://www.ftd.de/ub/in/1065243029175.html?nv=se.
218 http://www.estado.estadao.com.br/editorias/2003/07/14/eco038.html.
219 http://www.estado.estadao.com.br/editorias/2003/07/14/eco038.html.
220 http://www.radiobras.gov.br/materia.phtml?materia=136662&editoria=EC.
221 DG Trade A2/CG/SG/WB, Brussels, June 2003.