BenQ Mobile to begin talks between management and labor

This article was published by the Taiwan Headlines on May 11, 2006. It reports that BenQ Mobile, the handset-manufacturing unit of Taiwan's BenQ Group, recently started negotiations with trade unions at its German headquarters over the working condition for approximately 2,000 German employees. While BenQ plans to extend employment guarantees, the German workers plan to also ask for pay hikes.

BenQ acquired Siemens AG's handset unit in October 2005. The merger caused certain restructuring within the company, which in turn slowed down production of new mobile models. As a result, BenQ's world market share slipped to barely 4 percent in the first quarter of 2006.

BenQ has kicked off a series of cost-cutting steps, including closing down a design center in Ulm, Germany; selling an research and development facility to Motorola; and focusing its European research and development work in Munich for Germany and Poland. With these steps, the company predicts that it will be able to turn a profit in the fourth quarter of 2006.

Before BenQ acquired the handset unit from Siemens AG, Siemens offered its employees the employment guarantees. These guarantees will expire in June 2006, which prompted the company's management and labor to review the terms of the agreement.

BenQ plans to extend the guarantees, a move that is based on precedents in related fields in Germany. However, the company's German workers also plan to ask for pay hikes on grounds that some of them voluntarily cut their salaries by 30 percent two years ago. The German workers further plan to ask for longer-term agreements than BenQ's management has previously considered.

According to BenQ, the German employees have made remarkable contributions in helping the company cut costs.