German Trade Unions Worried about the Diversion of LED Technology to Prevent China’s OSRAM Acquisition

“German unions vowed to block acquisitions of OSRAM by Chinese companies” – At the time of the German government’s intervention in the acquisition of Chinese-owned companies in Germany, IG Metall, Germany’s largest trade union organization, recently stated that it will block German lighting group OSRAM. It may be acquired by a Chinese company. “Chinese investors are becoming the scapegoat for European issues.” German Berlin scholar on China’s problem, Florial Young, told the author on the 15th.

In the German "Business Daily" published on Monday, Wiesler, president of IG Metall's Bavarian chapter, said in an interview that the organization will firmly oppose any acquisition attempt given the potential negative consequences for OSRAM workers. He said that potential acquisitions should not only be viewed from the perspective of shareholders, but should also see the impact on other stakeholders, "especially the interests of employees must be properly considered." He believes that Osram is currently in an advantageous position in the market, has a solid capital structure, and because it focuses on technological innovations and customized solutions, it has attractive growth potential and therefore "does not require partners." According to reports, Wexler is the vice chairman of the Supervisory Board of Siemens Medical.

“The trade union’s clear position is unusual.” According to the “Business Daily”, industry insiders said that the union’s position has increased opposition to OSRAM’s buying power and apparently put more pressure on OSRAM’s leadership. IG Metall is the largest trade union organization in Germany with nearly 2.3 million members. Just last Wednesday, European union organizations such as IG Metall also launched steel worker demonstrations in Brussels to protest against cheap steel from China and the EU’s strict energy regulations for the steel industry. IG Metall’s Bavarian branch stated on its website that Chinese investors have been buying OSRAM for some time. The criticism of this program is: China's interest is mainly focused on technical knowledge and related patents. In other words, after the acquisition, OSRAM's key expertise will face significant risks and customers will be lost. Germany will also be affected as the investment's top choice. The British "Financial Times" quoted IG Metall spokesman Juntel on the 14th, said that people are really worried that any potential acquirer just wants to "suck away OSRAM's technology" and transfer production to locations outside Germany.

Founded in 1919, OSRAM is a company that manufactures lighting equipment and semiconductors. After the spin-off of the Siemens Group in 2013, Siemens still holds a 17.5% stake in OSRAM. Due to differences in its development strategy, Siemens is prepared to sell its shares. According to media reports, there are currently two Chinese capitals that intend to acquire OSRAM and have held relevant negotiations, but none have submitted exact quotes. German Financial Network said that after the Chinese company announced in September this year, OSRAM's share price rose. OSRAM’s current market capitalization is approximately 5.2 billion Euros, which is already double the time of listing. OSRAM declined to comment on trade union opposition to the acquisition.

"The Chinese have been waiting." "Business Daily" said that since the German Ministry of Economic Affairs halted the acquisition of German semiconductor equipment manufacturer Aisiqiang, and said that they would investigate the acquisition of OSRAM, the Chinese acquisition of German companies will become even more complex. The British "Financial Times" pointed out that Chinese investments in German industry are encountering increasingly strong resistance. Some Germans worry that some of the country's most advanced technologies will fall into the hands of Chinese people. “German deputy prime minister and economic minister Gabriel is a leader in protectionism, and the German Ministry of Economic Affairs has also proposed a draft law that will make it easier for the government to stop Chinese-funded purchases.” But Germans who support Chinese investment said that German trade unions Concerns that acquisitions may lead to job losses and factory closures are overdone. For example, when Midea purchased KUKA, it promised to retain its current position and factory site for the next 7 and a half years, and it will not delist or restructure the company during this period.

The union's opposition to whether it can prevent OSRAM from being acquired also raises questions. The Wall Street Journal stated that trade unions have maintained strong influence in European countries, including Germany and France. In September this year, due to the opposition of the German company's trade union, the merger of the American industrial gas supplier Praxair and the German Linde Group fell. The "Financial Times" stated that it is still unclear how the German Metal Industry Trade Union prevented the acquisition if the acquisition was supported by all shareholder representatives of the board of supervisors. Of the total six workers' representatives of the union, only two entered the OSRAM board of supervisors. A union spokesman said that "shareholder representatives will obviously avoid any conflict with the workers' representatives." But an insider familiar with Osram’s strategy stated that the German Metal Industry Union tried to “create a protective wall” and an “insecurity” around the company to deter potential buyers.

Germany’s Berlin scholar on China’s problems Frorisian expressed to the author on the 15th that the EU has encountered various problems, the competitiveness of enterprises has declined, the refugee crisis has escalated relations with the United States, and so on. IG Metall’s opposition to Chinese acquisition of OSRAM is a protection. Act. He believes that as long as it is properly handled, the acquisition of German companies by Chinese capital can create a win-win situation. Blindly refusing to acquire will only expose many loss-making companies to bankruptcy. Others will miss development opportunities, which is also detrimental to workers.

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