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In Germany, union culture clashes with Amazon’s labor practices

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In the United States, technology giants like Amazon are often celebrated as fonts of innovation and jobs.

But across the Atlantic — nein, non, no.

Even as President Obama spoke about middle-class jobs last week at an Amazon warehouse in Tennessee, Amazon was facing strikes at warehouses in Germany, its second-biggest market. Unions there say the company has imported American-style business practices — in particular, an antipathy to organized labor — that stand at odds with European norms.

"In Germany, the idea that warehouse workers are going to be getting opposition from an employer when it comes to the right to organize, that's virtually unheard-of," said Marcus Courtney, a technology and communications department head at Uni Global Union, a federation of trade unions based in Nyon, Switzerland. "It puts Amazon out in left field."

(Read More: Amazon.com looks to fill 7,000 jobs in 13 states)

Amazon is hardly out there alone, however. Large American technology companies are increasingly running into obstacles as they expand in Europe. For Facebook and Google, the running issue is privacy. Google was fined this year by German authorities for illegally collecting personal data while creating its Street View mapping service, after facing minimal sanctions over Street View at home. Meanwhile, European privacy regulators are considering tough regulations to protect consumers on the Internet, a direct challenge to Google, Facebook and other online companies that mine personal data.

Antitrust officials in Europe are scrutinizing Apple's relationships with wireless carriers, as well as Google's competitive practices. And Google, Apple and Amazon have all been criticized by European lawmakers for tactics that help them minimize their tax bills.

Amazon has been criticized for its working conditions in the United States — but not nearly to the same extent as in Europe. On the surface, Amazon's labor problems in Germany revolve around wages.

The union says workers in warehouses in two small German cities are properly classified as retail employees, and should be paid at the higher rate required for people who work in department stores and other retail outlets. Amazon says they are more properly classified as warehouse workers, and paid at a lower rate.

The subtext, though, is Amazon's opposition to unions in its warehouses as a general principle, because the company fears unions will slow down the kind of behind-the-scenes innovation that has propelled its growth.

Dave Clark, the company's vice president of worldwide operations and customer service, says Amazon views unions as intermediaries that will want to have a say on everything from employee scheduling to changes in processes for handling and packaging orders. Amazon prizes its ability to quickly introduce changes like these into its warehouses to improve the experience of its customers, he said.

(Read More: 'You can't bet against' Amazon: Pro)

Last year, the company spent $775 million to buy a manufacturer of robots that it plans to eventually deploy in its warehouses, though it has not said when they would come to Germany. The last thing it wants is to have to get approval from unions for such changes.

"This really isn't about higher wages," Mr. Clark said. "It isn't a cost question for us. It's about what our relationship is with our people."

"We're still a developing industry," he added — despite the fact that Amazon posted revenue of $15.7 billion in the last quarter and the company is enjoying a buoyant stock price.

In the United States, Amazon successfully thwarted efforts to unionize. Over a decade ago, Mr. Courtney of Uni Global led an unsuccessful effort in the company's home state of Washington to organize Amazon's customer service representatives.

(Read more: Buying a Picasso on Amazon? Not so crazy anymore)

Two years ago, an investigative article by The Morning Call newspaper in Pennsylvania's Lehigh Valley chronicled poor working conditions in an Amazon warehouse in the state, including instances where it stationed paramedics outside to take heat-stressed workers to the emergency room. Amazon says it has addressed the problem by installing air-conditioning in all of its facilities.

More recently, a firm that provides temporary employees for Amazon warehouses is defending itself in a class-action suit that claims the firm shortchanged workers on pay as they waited in security lines to exit warehouses.

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Jonathan Barnes, a spokesman for the staffing firm named in the suit, Integrity Staffing Solutions, declined to comment.

But it is a different story in Germany, where the powerful labor movement behind the Amazon strikes traces its roots back more than two centuries.

(Read more: Easing Inflation, Wages Aid Case for Euro Zone Simulus)

Mr. Courtney, the Swiss-based head of the federation of trade unions, said other American tech giants, including I.B.M. and Hewlett-Packard, have been more tolerant than Amazon of unions in their European operations.

And the strikes in Germany raise especially knotty problems for the company, which has ambitious expansion plans there.

Germany is Amazon's second-biggest market after North America, accounting for $8.73 billion, or 14 percent, of total company revenue in 2012. Even as workers in Bad Hersfeld and Leipzig began their recent strikes, Amazon announced plans to open a ninth logistics center in Germany, in the former East German state of Brandenburg, west of Berlin.

The strike was organized by the powerful service workers union ver.di, which has about 2.3 million members across Germany, and a sizable war chest to pay striking workers.

Thomas Schneider, ver.di's point man for organizing the strike at the Leipzig plant, argued that Amazon's tactics, along with its refusal to even enter into talks with the unions, created an image of being against its own work force that could hurt it in the long run.

"When it is put under pressure, Amazon reacts," Mr. Schneider said.

The company says that after a year, its German workers make more money on average than those in similar businesses. And it says it has complied with German labor laws by allowing worker councils at its warehouses. But these councils are legally forbidden from getting involved in wage deals, which is why the union wants to get involved.

(Read more: Amazon posts quarterly loss; shares dip)

In Germany, Amazon's Mr. Clark said, the strikes had not disrupted its business because the number of workers walking out had been relatively small. When necessary, the company has been able to shift orders to other facilities that are not striking, he said.

The union, though, credits the strikes for recent improvements to overtime scheduling, an increase in the number of break rooms and a pledge by Amazon to pay Christmas bonuses, a standard practice in German industry.

At a strike in June with hundreds of workers who gathered outside the gates of the Leipzig plant, the head of ver.di, Frank Bsirske, played on Amazon's motto of "Work hard. Have fun. Make history," telling the strikers they should take it to heart.

"You are making history by striking," Mr. Bsirske told the crowd to cheers and whistles. "You are making history by demanding higher wages. We are not going to let a big American company come here and play Wild West. This is a clash of cultures."

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