Amazon.com Inc. is getting an unwelcome present in Germany this holiday season: labour unrest.
Workers at seven of the Internet giant's nine German distribution centres began walking off the job last week and some will continue striking up until Christmas Eve.
The dispute is grounded in a cultural clash. Amazon's style is to deal directly with its employees without a union as an intermediary. But that approach is at odds with the system that prevails in Germany, where there is a history of powerful unions collaborating with corporations and forging sector-wide wage agreements.
This month's strikes, timed to coincide with Amazon's peak shopping season, are the largest so far in a series of walkouts that began last year. They mark an escalation of the quarrel between Amazon and Verdi, a large and diversified German union representing employees from the retail sector to the civil service.
The union wants Amazon to begin negotiating a collective bargaining agreement, preferably one where its German employees receive higher wages in line with other such contracts in the retail and mail-order sector. Amazon has refused. It considers its staff part of the logistics sector, where wages are lower, and says its compensation is competitive for such work.
The labour dispute feeds into a much larger discomfort with American Internet and technology companies: In Germany and Europe more broadly, some are uneasy with the tactics employed by titans such as Google Inc., Apple Inc., Facebook Inc. and Amazon. The concerns range from how such firms handle personal data to how they approach unions to how they sidestep taxes.
Amazon entered the German market in 1998. As in the United States, it has never shown any inclination to allow unions to organize its employees. "We don't see a need for that," said Tim Collins, director for Amazon's logistics operations in the European Union, in an interview with the Financial Times earlier this year. "Any friction that gets between us and our associates slows down innovation, slows down change, slows down improvements on the shop floor, and we don't see that as being good at all."
In Europe, such sentiments have contributed to the characterization of American firms as the "Wild West" of employers, where traditional safeguards on pay and work conditions aren't respected. In Germany, there is a long history of major manufacturers collaborating with unions, whose representatives sometimes hold seats on a company's board of directors.
"The Amazon culture is based on a hostile attitude toward unions," said Christoph Schmitz, a spokesman for Verdi. "In Germany we are used to [a] social partnership" between employers and unions. That partnership helped steer the country through the aftermath of the financial crisis, he said, and is "definitely part of Germany's economic success."
The current confrontation is significant for both sides. Germans have proven avid online shoppers and the country is Amazon's second-largest market by sales after the U.S. Verdi, meanwhile, is trying to extend its influence into an industry – e-commerce – of growing importance.
"There's a lot at stake," said Hajo Holst, a professor of economic sociology at the University of Osnabrueck. Amazon stands to set a precedent, he noted. "They challenge the German system and they do that openly."
Amazon has 10,000 permanent employees at its German distribution centres and hires another 10,000 temporary workers to handle seasonal demand. The pay for its workers starts at €9.75 ($13.90) an hour, above Germany's minimum wage. It also offers the opportunity to earn stock grants and has introduced a Christmas bonus, a standard practice in Germany.
"We have attractive packages," said Anette Nachbar, a spokeswoman for Amazon in Germany. "Our compensation is definitely competitive."
Ms. Nachbar added that the company had seen no disruptions in its operations during the critical holiday period as a result of the strikes, thanks to temporary workers and support from distribution centres elsewhere in Europe. She said that by Monday, fewer than 1,850 employees were participating in the strikes; Verdi said that about 2,000 had walked out on Monday, but that last week the number of strikers hit 2,700.
In October, Amazon opened warehouses in Poland, a country where it does not have an e-commerce presence and where wages are lower than in Germany. The new Polish distribution centres will serve the Western European market and Germany in particular. Amazon is also opening warehouses in the Czech Republic, another neighbouring country, in 2015.
For now, the two sides have reached a kind of impasse. Amazon is steadfast in its refusal to negotiate with the union. The union is equally resolved to continue the strikes, which are growing bigger and longer as time passes.
Given Amazon's reach among German consumers, this controversy is "close to everyone," Prof. Holst said. "The question is what do we as a society want to pay for work and what is the value of work?"
"It doesn't sound like [Amazon] will give in," he added. "And I cannot imagine that the union will give in."