Germany

All hard coal production was located in West Germany and was carried out in underground mines. From 1947 to 1957, the Saar Basin, the second-largest mining region after the Ruhr Basin, was under the administration of the French army, which also controlled coal extraction.

In 1957, Saarland returned to Germany politically, and in 1959 economically. The remaining mining areas of minor economic importance were Aachen and Ibbenbüren. For Germany, domestic hard coal resources were more than merely an energy carrier, as they helped rebuild industry and enabled the so-called economic miracle. Moreover, coal contributed to Germany’s reintegration into an international union: the European Coal and Steel Community (ECSC). This predecessor of the European Union was founded in 1951 and, alongside Germany, or the Federal Republic of Germany, its founding members included Italy, Belgium, France, Luxembourg and the Netherlands.

After the end of the war, in order to facilitate Germany’s reconstruction, the price of domestic coal was set at a relatively low level. In 1956, the ECSC forced Germany to liberalize the price and introduce a market system for German coal. The removal of the energy sector from price controls, combined with the end of the Suez Crisis, led to the growing importance of cheap imported crude oil and to a decline in demand for hard coal.

The year 1958 marked the beginning of the coal crisis. In addition to coal being replaced by crude oil, domestic coal was increasingly exposed to pressure from comparatively cheaper foreign hard coal. The coal and steel industry, the “Montanindustrie”, together with influential trade unions and politicians, formed a powerful network protecting domestic coal production.

At that time, coal was not only of regional importance for workers and the economy, but also guaranteed the security of energy supply, making it a strategic good. Therefore, and also in order to prevent structural disruption, the German hard coal sector received subsidies from 1968 onward to offset the price difference between domestic and imported coal. Already from 1964, domestic coal prices exceeded imported coal prices. At that time, hard coal accounted for more than 70% of primary energy consumption in West Germany. For example, in 1990, coal’s share fell to 19% of primary energy consumption, and in 2017 to 11%. At its peak, even before the coal crisis of 1958, the coal sector employed more than 600,000 people. By 1968, 320,000 people had lost their jobs. The development of the coal and steel industry made the Ruhr Basin the most populous region in Germany.

Coal crises and the first structural policy programs in the 1950s and 1960s

The entire process of reducing employment and production in mining, as well as transformation in Germany, was strongly influenced by the “Act on Codetermination in the Coal and Steel Industry” (“Montanmitbestimmungsgesetz”) of 1951, which granted the employee side an equal number of votes on company boards.

All measures implemented in enterprises along with the reduction of production were also agreed with employees. Initially, this law did not include Saarland, because it was independent of Germany and occupied by the French military administration. After Saarland returned to West Germany in 1957, Saarbergwerke AG was established, a state-owned enterprise 74% owned by the federal government of West Germany and 26% by Saarland.

The first response to the coal crisis of 1958 was to shorten working hours on shifts and move employees into early retirement, financially supported by the state. In the short term, these measures were able to mitigate the negative consequences for affected workers. However, between 1957 and 1967, more than 300,000 of the 600,000 workers lost their jobs in hard coal production, around 267,000 in the Ruhr Basin and 23,400 in Saarland.

The first years of coal production reduction caused by the oil crisis overlapped with the final years of Germany’s “economic miracle.” Most workers were therefore able to move into other occupations, mainly in the metal industry. As a result, unemployment benefits were necessary only for workers approaching retirement age. Apart from new employment opportunities in North Rhine-Westphalia itself, such as the “Opel” automobile factory in Bochum, there was significant outward migration of former miners beyond that federal state, as they found employment in other parts of the country, especially in southern Germany.

In order to control the decline in coal production, mining companies in the Ruhr Basin were forced to merge their production into the newly created company RAG AG. In Saarland, hard coal was already produced almost entirely by Saarbergwerke AG, but production plants were consolidated in order to increase their efficiency.

Additionally, in 1968, the German coal sector concluded sales agreements with the energy and steel sectors. These agreements included state subsidies covering the price difference between domestic and imported hard coal, which was intended to enable an organized and slowed decline in coal production and related employment.

In the same year, the structural policy program “Ruhr Development Program” was launched, with a value of 17 billion German marks, or 8.7 billion euros. The government of North Rhine-Westphalia recognized that, due to the decline in domestic coal production and rising unemployment, economic reorientation was necessary. Therefore, the structural program, which aimed to attract new enterprises from other industries, combined previously individual and isolated measures. Influential mining and steel companies initially opposed these plans by refusing to make the land they owned available to newly emerging companies, as they feared losing skilled workers and increasing wage levels in the region. Another objective of the program was to improve educational and transport infrastructure in order to enable economic reorientation. Saarland, after its reintegration into Germany, faced additional challenges: due to its special status as an occupied territory, it was not included in payments granted under the Marshall Plan and required state aid between 1956 and 1961 amounting to 2.8 billion DM, or 1.4 billion euros, of which 500 million DM, or 256 million euros, was spent on economic and industrial policy. At that time, Saarland was heavily dependent on coal and steel production. In 1957, 36% of all employed persons worked in mining and 43% in the metal industry. Therefore, when the coal crisis began, the efforts of the federal authorities were directed primarily toward supporting the coal industry in order to mitigate social problems, but with the effect of preserving the structural weaknesses of the economy.

Regardless of political measures, between 1960 and 1970, mining employment in Saarland fell from 53,000 to below 27,000.

In 1969, the “Saar Structural Program” was implemented, aiming to achieve full employment by creating 50,000 jobs and overcoming differences between regional and federal economic development. The strategy included elements intended to strengthen the coal and steel sector and increase employment in other developing sectors.

At the same time, Germany experienced mass development of the automotive industry, and car manufacturers and suppliers wanted to enter the European market and expand their operations. Saarland had suitable conditions for car manufacturers, as it could provide skilled workers from mining and the steel industry and make sufficient space available for new companies. In Saarland, mining enterprises received bonuses for reducing coal production only if they offered their real estate for new commercial use.

Resistance in Saarland to new enterprises may additionally have been lower than in the Ruhr Basin, because the mining enterprise producing almost all coal in the state was publicly owned.

The Saar Structural Program, later transformed into the Saar-West Palatinate Action Program, was planned for the years 1972-1989 and had 700 million euros at its disposal. Saarland granted companies tax reliefs, low interest rates and bonuses. Due to these benefits and the close distance to car manufacturers in southern Germany, suppliers and manufacturers, including Ford, established their sites in Saarland. Between 1960 and 1972 alone, around 140 enterprises established operations in Saarland. In total, around 40,000 new jobs were created, including 25,000 in newly established companies.

The economic reorientation strategy failed in the Ruhr Basin, and unemployment rose significantly from 12,000 in 1970 to almost 100,000 in 1976.

A milestone in the long-term changes in the hard coal industry was the establishment of RAG AG by the federal government in 1969.

The current structure of RAG AG was shaped in its general outline in 2000 and reflects a strategy focused on diversifying activities that facilitated the mitigation or neutralization of the effects of reducing the production potential of the German hard coal industry and the related employment reduction. This structure was as follows:

Deutsche Steinkohle AG, German Hard Coal AG – abbreviated as DSK.

RAG INTERNATIONAL, mining companies operating abroad.

RAG IMMOBILIEN AG.

STEAG AG.

RÜTGERS AG.

RAG Saarberg AG.

Companies providing services for the entire group:

• RAG Bildung GmbH, training,
• RAG Informatik GmbH, IT,
• RAG Versicherungs-Dienst GmbH, insurance services.

As a result of the merger of three coal producers in Germany, Ruhrkohle AG, Saarbergwerke AG and Preussag Anthrazit GmbH, one coal extraction company was created under the name Deutsche Steinkohle AG. Within the RAG structure, it was the only company engaged in coal extraction in Germany. Production was concentrated in 12 mines, and employment at the end of 2001 amounted to 56,000 workers, including 24,300 underground workers.

The economic miracle had ended, and the “land blockade” prevented new companies from settling in the region. A new approach was introduced to strengthen local potential by modernizing existing industries, namely coal, steel and energy, with investments totaling 2 billion DM, or 1 billion euros. After the second oil crisis in 1979, unemployment increased further and the problems associated with the high sectoral specialization of coal and steel regions became evident.

Between 1980 and 1984, the structural policy program “Action Program Ruhr” was implemented, with the aim of beginning the economic reorientation of the Ruhr Basin and creating new industries.

This program created incentives for technology transfer between universities and enterprises. In addition, the program aimed to develop the service sector in the Ruhr Basin. It combined individual measures in various fields, such as technology, innovation support, ecology, culture and the labor market, and was intended to coordinate numerous activities of the federal government, the federal state and municipalities. The program, worth 6.9 billion DM, or 3.5 billion euros, followed a new principle that emphasized the participation of regional stakeholders in order to reduce their resistance to the transformation. As part of the program, the State Development Company, Landesentwicklungsgesellschaft, and the Ruhr property fund were established in order to purchase and renovate former industrial sites.

Thanks to the “Action Program Ruhr”, several new technology centers were created and the attractiveness of new locations improved. Nevertheless, as with previous programs, it failed to diversify the economy. One reason was the large investment in modernization programs for existing industries.

Politicians realized that there was no single industry that could replace the steel and coal sector in such a way as to stabilize the Ruhr Basin’s economy on its own. Earlier programs had not taken into account the individual strengths and weaknesses of cities. After the second oil crisis in 1979, the unemployment rate almost tripled within six years, reaching 14.2%, compared with 8.7% in the rest of the country. A commission for coal and steel regions, Kommission Montanregionen, was established and involved regional stakeholders in the strategy development process. In 1987, the “Future Initiative for Coal and Steel Regions” program, Zukunftsinitiative Montanregionen, was launched with a value of 2 billion DM, or 1.0 billion euros. Under this program, financing innovation and technology, worker education, infrastructure, environmental improvement and energy issues were considered fundamental.

Between 1990 and 2000, employment in the Ruhr Basin fell from 95,000 to around 53,500, in the Saar Basin from 19,200 to 11,300, in the Aachen Basin all 7,700 jobs were lost, and in the Ibbenbüren mine employment fell from 3,700 to 2,650. These figures include both miners and other workers directly involved in the industry, but do not include indirect employment associated with service companies working for mining.

German mining law also requires coal producers to carry out initial reclamation works on post-mining sites, after which these areas may be used for alternative economic development. Usually, such reclaimed sites are acquired by one of the regional development agencies. In the case of North Rhine-Westphalia, this was the LEG agency, Landesentwicklungsgesellschaft Nordrhein-Westfalen, and the EWA agency responsible for developing the eastern part of the Ruhr Basin. The EWA agency was established in 1992 as a partnership platform between the state government, the LEG agency, local chambers of commerce and major employers in the eastern part of the Ruhr Basin. Its task was to facilitate the transformation of degraded mining areas into sites that could be used for alternative economic activities.

The EWA agency was made responsible by the state government of North Rhine-Westphalia for structural changes on former mining sites. The agency received post-mining sites after the initial reclamation phase carried out by RAG and prepared them to a condition in which they could be successfully reused by alternative industries.

At the same time, however, the LEG agency, within its own powers, invested significant funds in purchasing unused post-mining sites in order to convert them for other uses.

As part of the Action Program in the Ruhr Basin, launched in the early 1980s, the national government allocated around 100 million DM annually from its budget for the purchase of land and its reclamation – not only for further use by other industries, but also for recreational areas and housing construction. To implement this, the LEG agency managed the Ruhr Property Fund, which provided financing for post-mining land revitalization projects, often in cooperation with the EU. Examples of such projects include the international trade fair grounds in Dortmund, the national garden show grounds in Gelsenkirchen, and the cultural center on the site of the former coking plant at Zollverein in Essen.

As a rule, the LEG agency took over areas previously managed by Deutsche Steinkohlereviere GmbH between 1966 and 1998. Although around 4,000 hectares were reclaimed in this way, the implementation period for individual projects was then around 10 years from planning to completion.

Other organizations involved in the economic revitalization of the Ruhr area included Kommunalverband Ruhrgebiet, responsible for regional planning, Initiativkreis Ruhrgebiet, responsible for attracting investment to mining areas, and Gesellschaft für Wirtschaftsförderung, responsible for economic development in North Rhine-Westphalia. A similar organization in Saarland was Gesellschaft für Wirtschaftsförderung Saar, responsible for attracting investment to the region. Saarbergwerke also provided its own employment agency services, using local knowledge to help former miners find new employment.

Comparable measures were also launched in the Aachen Basin during the final stage of mine closures. EBV, Eschweiler Bergwerks Verein, then a subsidiary of RAG, established BGA, Beteiligungsgesellschaft Aachener Region, in order to develop non-mining activities in the basin. BGA’s scope of activity included metal industries, building materials, plastics, real estate trade and various services.

In order to obtain financing, regions had to submit projects themselves, developed jointly with regional stakeholders such as craft chambers, trade unions and environmental organizations. The project “International Building Exhibition Emscher Park” between 1989 and 1999 is another example of consensus-based regional policy. It combined 120 small projects whose primary purpose was to improve the impact of location factors in order to create a new identity for the Ruhr Basin. These projects, with a total budget of 5 billion DM, or 2.6 billion euros, included measures involving the construction of an underground sewage network, cultural and tourism projects, 17 technology centers and the reclamation of mining damage.

The next phase of mining restructuring agreed between various national parties

The next phase of mining restructuring, agreed in 1997 between various national parties as the “Compromise”, received approval from the European Commission and provided public aid until 1999. Public aid for mining for the years 2000 and 2001 was approved on the condition that a larger part of the funds be allocated to operational support for mines scheduled for closure. Aid for 2002 was to be allocated to operational aid, aid for the reduction of activity, the preservation of jobs for underground miners, and aid for extraordinary costs. In total, for 2002, the Commission approved aid amounting to 3.557 billion euros.

The Commission also approved a restructuring plan for the German coal industry covering the years 2003-2007. This aid was compatible with the proper functioning of the common market. Aid for the reduction of activity was intended to cover the difference between production costs and the selling price of coal. Mines benefiting from aid for the reduction of activity were to form part of the mine closure plan.

The restructuring plan approved by the Commission covered the period from 2003 to 2007, with more detailed data provided for the period from 2003 to 2005. The plan provided for a gradual reduction in financial aid to the German coal industry, which was to lead to a permanent reduction in extraction while maintaining target production at around 16 million tonnes per year. This aid was decreasing in nature.

Between 1972 and 2000, around 120,000 former miners benefited from early retirement, with an annual average of 4,000-6,000 workers using this instrument. From 1998, this figure decreased significantly, and around 2,000 miners per year retired early, mainly from the Saar Basin, where the industrial structure was different before Saarbergwerke was incorporated into DSK. Older miners worked in the mines of this basin than in the Ruhr Basin. Early retirement was available to underground miners once they reached the age of 50 and to surface workers at the age of 55. The first five years of early retirement benefits were paid from the federal budget and state budgets in the form of adjustment aid, with the average monthly payment amounting to around 3,200 DM, or 1,600 USD, for an underground miner and 2,550 DM, or 1,330 USD, for a surface worker. After the five-year period, recipients of this benefit moved to regular mining pensions, receiving slightly higher payments than before and around one third more than other pensioners. Those taking early retirement also received one-off benefits of up to 60,000 DM, with the exact amount depending on length of service.

From 1995, RAG employees affected by mine closures or mergers could receive training provided by their own company, aimed at securing the qualifications necessary to find alternative employment or to transfer to other non-mining RAG companies. Training was financed from the resources of RAG’s social plan as well as from the employment department of the federal government. Training infrastructure was usually provided by RAG.

An important role in restructuring was played by the crisis-management model known as the social plan. The social plan was the sum of all arrangements that had to be agreed between the employer and the works council in writing and implemented in order to minimize the negative economic consequences for employees resulting from major changes in the enterprise. Social plans play a central role in German labor relations. Since a social plan is legally required only in those enterprises or plants where a regularly elected works council exists, these plans are a very important reason for electing a works council. The works council is a body elected directly and by secret ballot by all employees of an enterprise in order to represent their interests. In crisis situations within an enterprise, social plans are the basic instrument for protecting employees against the negative consequences of change.

The social plan in coal mining differed in many respects from plans in other sectors. Pension and health insurance conditions in the mining sector differed from those found in other branches of the economy. The “principle of substitutability” was an important factor in the practical implementation of adjustment programs in German hard coal mining. Older workers could, starting from the age of 50, apply for a compensatory allowance enabling them to take early retirement, thereby bridging the period until they met the conditions entitling them to pension benefits and allowing their younger colleagues to remain in mining. Only by applying this principle was it possible to employ a strictly limited number of new young people each year.

The system of compensatory allowances was introduced in 1972 on the basis of the Treaty establishing the European Coal and Steel Community and offered very broad social protection for older workers in the event of job loss as a result of employment rationalization.

If specific conditions were met, underground workers aged 50 or over and surface workers aged 55 or over were entitled to receive such a pension-like benefit. The Federal Office for Economic Affairs was responsible for paying compensatory allowance benefits. These benefits were supplemented by favorable support benefits from enterprises, included in the social plan, which provided, among other things, for the supplementation of the compensatory allowance. Even after two decades, the compensatory allowance combined with a compensatory payment or pension remained the most important form of benefit and, as such, the most effective crisis-management instrument in German hard coal mining.

For example, the Builders’ Association in North Rhine-Westphalia was willing to employ around 2,500 new workers annually, with preference given to former miners.

What kind of social protection could a miner leaving a mine count on? The following is a list of possibilities:

1. Compensatory allowances from public funds:

• subsistence benefits: a wage supplement upon re-employment and a transitional benefit in the event of unemployment,
• allowances for persons taking up work away from their place of residence in the form of reimbursement of travel costs for a maximum of one year, reimbursement of relocation costs and assistance in covering furniture and equipment costs, as well as severance pay and reimbursement of costs of visits to the family home,
• a one-off benefit of 2,000 DM or 4,000 DM, depending on the circumstances, instead of a wage supplement or unemployment benefit,
• a one-off home heating fuel allowance of 240 DM, or 120 DM for miners without their own household.

2. Benefits paid by the enterprise to transferred workers:

• company wage supplements and a relocation allowance,
• “one introductory shift” at full pay,
• reimbursement of travel and relocation costs and a furniture and equipment allowance,
• a housing rental allowance.

3. Benefits paid by the enterprise to dismissed workers:

• wage supplements or supplements to temporary benefits,
• a company benefit not exceeding 2.5 months of gross salary and a minimum payment of 3,000 DM for more than 20 years of work in hard coal mining,
• the right to live in company-owned housing, even in the event of a change of owner, and permanent rent reductions for a period of three years,
• domestic fuel at a reduced price,
• granting paid leave or payment of compensation for paid leave.

Only in 2007 did the growing influence of EU regulations on competitiveness and state aid for the hard coal sector force Germany to begin the process of withdrawing from hard coal production subsidies, which between 1950 and 2008 reached, together with other privileges, a level of 289-331 billion euros. Saarland closed its last mines in 2012, also due to growing safety concerns caused by earthquakes related to extraction in the region. The last mines in the Ruhr Basin were closed in 2018.

When the date for ending subsidies was negotiated, one of the main points of these negotiations was the measures ensuring social security for workers, so that every person previously employed in hard coal production would retire and receive other social benefits or a new job, under the “Steinkohlefinanzierungsgesetz.”

The mining industry, trade unions and social democrats advocated 2018 as the date for ending production. Their main argument was “social compatibility” for workers and the necessary adjustment time for the entire Ruhr Basin. The year 2012 was also discussed as a possible end date. The IG BCE trade union stated that 11,000 workers would then lose their jobs.

Ultimately, the date for ending subsidies for coal mining was set at 2018, also thanks to the strong network of trade unions. In Saarland, extraction ended in 2012. After employment in coal mines ended, workers were to spend three years on closure work and then receive subsidies for five years in order to bridge the period until they entered the regular pension fund at the age of 62 in 2027.

The federal parliament estimated the total costs of the subsidy phase-out period between 2006 and 2018 at around 38 billion euros. Additionally, the parliament projected around 2 billion euros for pensions and mining damage, as well as an additional 7 billion euros for so-called transitional costs after 2018.

Managing restructuring

The challenge for the development of structural policy was to define the right governance system to guide the transformation, especially in Germany’s federal context. The first large projects initiated at the national level were ineffective because they encountered resistance at both regional and local levels. Subsequently, the decision-making and planning process shifted to a more regional level, taking into account endogenous local potential and increasing public support for the transformation by strengthening bottom-up participation of local stakeholders. This allowed each region to benefit from its individual strengths and, compared with top-down decision-making, reduced local resistance to transformation. Additional coordination of these various polycentric activities is necessary in order to enable an efficient and sufficiently rapid transformation process. The creation of one institution with sufficient capacity, representing the entire Ruhr Basin area, helped coordinate national financing. Nevertheless, it is not always possible to create a coherent strategy for all cities within a region.

In the case of the restructuring of German hard coal mining, most costs were related to structural and social policy aimed at slowing the economically driven reduction of unprofitable production. A fair and timely restructuring required financial resources and a fair allocation of responsibility for costs. In Germany’s case, most subsidies for the Ruhr Basin and Saarland were financed from the national budget. Nevertheless, the federal states and mining companies shared in the costs. Since future coal phase-outs are expected in most cases to require political decisions motivated by concerns about global climate change, the costs should be borne not only by the regions, but rather by the entire country, if not at an international level. Moreover, it will be necessary to implement measures that ensure sufficient financial contributions from coal companies to cover the costs caused by their activities, such as the costs of reclaiming post-mining sites.

As a founding signatory of the ECSC Treaty, Germany benefited from long-term advantages resulting from ECSC funds, especially in relation to the effects of employment restructuring in the hard coal industry. In addition, both the Ruhr and Saar basins benefited from the regional and social development funds of the European Community. The Ruhr Basin received around 4.1 billion euros from the EC regional and social development fund between 1989 and 2013, while Saarland received 328 million euros between 2000 and 2013.

In the 1990s, the Ruhr Basin and Saarland also received significant support under the RECHAR program, amounting to 81.3 million ECU, or 100 million USD, during the first stage of the program from 1990 to 1993, and a further 184 million ECU, or 230 million USD, between 1994 and 1999. However, one of the main benefits obtained by Germany’s mining regions during those years consisted in the European Commission’s approval of restructuring programs for the sector submitted by the German federal government.

Summary

The following conclusions can be drawn from the experience of restructuring the German coal industry:

• cooperation between all parties involved is fundamental to the successful implementation of restructuring,
• the use of “social plans” and the mandatory establishment of works councils, which participated in key company decisions, was a very successful undertaking, because those most affected by restructuring felt that they were involved in making some of the decisions in the restructuring process,
• the autonomy provided by the state government through the federal system in relation to regional planning was a fundamental benefit for the areas most affected by restructuring in the hard coal industry,
• early retirement proved to be the most useful tool for reducing employment until fewer and fewer miners were eligible to use this instrument, at the beginning of the 1990s,
• in this context, short-time work was also helpful in reducing coal extraction, but it merely postponed early retirement benefits,
• diversification of company activity proved to be a useful measure in developing alternative employment in former mining communities; by 1999, RAG employed more than 100,000 workers, of whom 60,000 were employed in coal mining; EBV and Saarberg also undertook activities related to business diversification programs, which provided alternative opportunities both for their own employees and for the next generation,
• concentrated investment in training infrastructure, from training centers to universities, helped create an economic environment in which high-tech companies could be established with confidence that the available workforce possessed the required qualifications; although this approach may offer limited prospects for those directly affected by the restructuring of the coal industry, it addresses the long-term employment needs of subsequent generations.

The Ruhr Basin and Saarland experienced a 50-year restructuring of the coal industry that was predominantly economically driven. Since 1960, many different structural and social policy measures had been undertaken at national and regional levels in order to regulate, and usually slow, the pace of necessary structural change. The decision that most prolonged hard coal production in Germany was the support of mining enterprises through public subsidies. This also meant that none of the former workers was left to fend for themselves, thereby securing the right to a fair and timely transformation.

Saarland achieved greater success earlier during employment restructuring, but its new dependence on the automotive industry creates another risk. The economy of the Ruhr Basin, in turn, transformed more slowly, but is now more diversified.

The involvement of local stakeholders is important for identifying the strengths and weaknesses of regions in adapting, developing and implementing local strategies. Both mining regions had similar structural problems after the coal crisis, and both sought alternative industries. In the Ruhr Basin, initially neither mining enterprises nor state authorities offered their land to new companies, which prevented, for example, the establishment of Ford Motor Company in Herten and Hamm, in the Ruhr Basin, in the 1960s. Opel, another car company, was able to settle in Bochum, in the Ruhr Basin, only thanks to additional support from the municipality. Saarland took a different approach and succeeded in attracting Ford Motor Company in the 1960s through subsidies, bonuses and tax reliefs. This situation shows that attracting new industry depends on location, timing, as well as the availability of trained workers and available land.

Apart from replacing mining jobs with new jobs in other industries, active and passive labor market policy and social policy play a major role in a fair and timely transformation. Anticipatory elements, such as retraining and early information about phase-out plans, can mitigate disruption connected with upcoming changes by helping hard coal miners remain in the labor market and encouraging new generations to choose educational and employment paths with better future prospects.

Example of a miner leaving due to restructuring

Alois Markscheider, name changed. Born in 1939, he began work in 1960 as a bricklayer at the “Hansa” mine. In order to increase his earning potential, he underwent training as a face worker, passing the examination in 1966. After the closure of the “Hansa” mine, he remained employed there on a project and, in 1980, was transferred to the “Minister Stein” mine. He worked there as an underground instructor. He received a transfer payment of 4,500 DM and was entitled to use a free company bus to and from work. After underground training at the “Minister Stein” mine was discontinued, Markscheider was transferred to the “Haus Aden” mine as an instructor and received a monthly commuting reimbursement of 150 DM, although no further transfer benefit was paid to him. In 1989, he left mine employment at the age of 50, when his last gross salary was around 3,800 DM. In addition to a compensatory allowance of 2,100 DM net and a company supplementary benefit of 380 DM, he also received a one-off tax exemption amounting to 9,250 DM. After he turned 55, the compensatory allowance was replaced by a temporary mining compensatory pension, KAL. From the age of 60, he was entitled to receive a normal mining pension.

Example of the merger of the Consolidation and Nordstern mines

The “Consolidation/Nordstern” mine was located in the municipality of Gelsenkirchen, in the north-western part of the Ruhr Basin. At the end of 1990, it employed 4,268 people, including 434 junior employees. The plant achieved average daily production of almost 9,800 tonnes. In mid-1988, the supervisory board decided to merge the “Consolidation” and “Nordstern” mines into one combined mine, with the intention of reducing annual production to around two thirds of the initial level.

A further merger of the “Consolidation” shaft with the “Hugo” shaft was planned. The main objective of crisis management was to avoid conflicts between enterprises and their employees, such as those that had occurred before the closure of the “Zollverein” mine. For this reason, the works council was involved in planning from the beginning. As part of the employment reduction program, weekly discussions were also held with employee representatives. The new adjustment concept provided that employees would first move into early retirement, and only afterward would transfers be made or offered.

The point was to keep the number of transfers as low as possible, because the burdens associated with transfer, including the loss of social surroundings and longer distances to the workplace, bring many additional problems, such as an increase in sickness absence.

All merger plans were coordinated by a neutral committee composed of HR directors, the chairman of the Works Council and his deputy, as well as plant directors of the “Consolidation” and “Hugo” mines. A constant and transparent information and personnel policy proved to be an important factor in effective crisis management in connection with the creation of the “Consolidation/Nordstern” mine, as did extensive assistance measures related to searching for and securing housing. Nevertheless, several serious problems remained:

• the entire management staff was advanced in age, which meant that exceptions had to be introduced for management staff in the regulations on early retirement; it was important that such exceptions be accepted by all parties,
• another problem was the significantly lower underground labor productivity, because experienced teams from the previous two mines were broken up and mixed – an inevitable consequence was a decline in daily production,
• a particular problem related to transferring workers to other mines was the high proportion of foreign workers, 41.8% of underground employees at “Consolidation”, and especially Turkish miners. Transfers were often difficult due to a higher sickness rate and problems related to the integration of this specific group of workers.

Zygmunt Borkowski