Update: Report on the general staff meeting now in English

A summary of Markus Friedel’s (IG Metall) talk at the general staff meeting in Rhein-Mosel-Hall on january 31, 2023 (PDF)

Allow me to introduce myself briefly. My name is Markus, and I am 53 years old. I have been living in Koblenz for a year and a half, but I’m originally from Baden-Württemberg, near Heilbronn. In 1984, I completed an apprenticeship as a machine fitter, and in 2001, I started working as a maintenance technician in the automotive supply industry at KS ATAG. At some point, I became a works council member and later its chairman, also serving on the supervisory board of the corporation. In 2021, I started working for IG Metall and moved to Koblenz. In my leisure time, I enjoy biking, and I can be called a „bike addict.“ My first biking experiences were cross-country races and downhill in the early 90s, where both races were still ridden with the same bike on the same weekend. My first marathon race was the Grand Raid Christalp in 1994, and I later crossed the Alps several times along different trials. In over 20 years, I have explored the MTB world as much as possible, and today, I enjoy going on bike tours and visiting bike parks with my son.

Now let’s talk about Canyon. Canyon is a company in the bicycle industry that stands out. Mr. Roman Arnold has achieved a great feat in turning a small family business into a global player. He has always brought the right people to Canyon at the right time, including Lutz Scheffer, Michael Kaiser, Tony Fadell, and James Le Bron. It is like an „American Dream“ coming true. But is this dream „Made in Germany“ as well? We’ll come back to this question later.

Meanwhile, the company’s success today would not have been possible without the people at Canyon. Everyone has contributed their part!

The numbers tell a clear story: the meteoric rise of Canyon in recent years. Revenue and profits have significantly increased every year.

It is no wonder that Mr. Roman Arnold concluded in the Canyon documentary (Canyon – the Inside Story): ‚In my opinion, Canyon is now the leading company in the bicycle industry… and we want to shape the future of cycling.‘ Senior managers at Canyon frequently compare the company to the car manufacturer Porsche in this sense.

With great respect, it is the people working at Canyon who inspire other bike enthusiasts and make the dreams of children, men, and women come true, not just in Germany but far beyond its borders. Bike fans in the US also get excited when talking about Canyon. Even Joe Breeze, a founding father of MTB, couldn’t stop raving about Canyon when I talked to him at the end of last year.

That’s the view of Canyon by externals. What happens when we look from the inside? while Canyon offers a lot of benefits such as after-work rides, employee discounts, and Christmas parties, employees ultimately go to work because they need to make a living. Although it makes a person proud to say that they are a part of Canyon, it’s not enough if the pay and working hours are far from the standard that is no longer explainable. So, what is the standard?

Canyon management often says, „Our framework, including payment, suits the market well.“ However, I take a different approach. Canyon is not like any other bicycle company. Other companies now look at Canyon through binoculars because none of them can keep up with Canyon.

Therefore, the right question to ask is, what or whom is Canyon comparable to?

The answer is quick to find – German car manufacturers! Between car manufacturers and Canyon, there are identical processes with comparable value chain structures – from development to production to the showroom, and service (either digital or over the phone in many cases in the auto industry).

German car manufacturers have settled collective wage agreements of the Metal and Electrical Industry with IG Metall. Let’s take a brief look at the personnel cost ratio, which implies how employees are paid in a company.

Generally speaking, the higher the human factor in the manufacturing process, the higher the personnel cost ratio. Or to put it in another way: the higher a production process is automated, the lower the personnel cost ratio.

As the graph shows, a bakery business has a much higher wage cost ratio (45%) than automotive manufacturers (22%), which have automated many production steps. … And then there’s Canyon, which has a personnel cost ratio far off (about 12% over the past few years). Something doesn’t fit here!

The formula for calculating the personnel expense ratio is: personnel cost ratio = personnel expenses / total output.

What does this mean to Canyon employees, particularly those in lower salary brackets? Despite working 40-hour contracts, many employees cannot live on their income at Canyon. As a result, they are forced to take on a second job just to make ends meet. We’re not talking about being able to afford luxuries like vacations or special expenses; even with a second job, these employees are only able to afford the most necessary. This situation may be manageable for a single person, but when you have a family to support, it becomes unacceptable, as many employees have pointed out.

Despite the many positive aspects of working at Canyon, we must acknowledge that the picture is not complete. It should be possible for employees to live on the wages they earn from their employer. Unfortunately, this is not always the case at Canyon, and action must be taken to address this issue.

So what does „taking action“ mean? The IG Metall members at Canyon don’t expect to be given Porsches (to use a car analogy), but they also don’t want to be given a vehicle with only one seat and no doors (no matter how cool it may look). What they need and expect is a standard of living that is as basic as a VW Polo. And for Canyon, that standard is the IG Metall collective wage agreements for the Metal and Electrical Industry, which are commonplace in many other companies in the region and beyond.

Now let’s return to the question posed at the beginning: „An American Dream – Made in Germany?“ The difference is clear. We can either have a company in which only a few people benefit from the success while the rest of the workforce struggles to avoid poverty (as is often the case in the US), or we can have a „Made in Germany“ standard that includes collective bargaining agreements to ensure that every employee receives a fair share of the company’s success and can live decently. This is a German standard that takes into account not just the capital side of the equation, but also the human side.

What do collective bargaining agreements actually regulate? We can’t cover the whole range of agreements here, but on the left slide, you’ll see a brief overview. On the right slide, we’ll focus on remuneration. For the metal and electrical industry in Rheinland-Rheinhessen, where Canyon is located, 11 salary groups apply. Each group consists of the basic salary, performance bonus, and possible supplements (e.g., shift work). In addition, there are annual special payments, which total approximately 170% of an average gross monthly income. Let’s look at what this means in terms of money on the next slides.

Firstly, an overview slide shows the classification of salary groups in a comprehensible way.

In column 1 (from the left), you’ll find the pay groups, structured similarly to Canyon’s but with a finer subdivision and a fixed value (see column 2). Column 3 adds an average performance bonus of 10%, with actual individual bonuses ranging from 0 to 20%, depending on how the employer evaluates each person. (But the average mustn’t be less than 10%). The average gross monthly income, including a yearly special payment converted into every month, is estimated in column 4, and column 5 shows the total annual gross. All values in columns 2-5 are adjusted to a 40-hour week to ensure comparability with Canyon. Column 6 describes different assignment classes, and each employee will be assigned to a specific pay group. The most important thing is that no one will earn less after the changeover. Finally, column 7 calculates the amount for a 35-hour week. Those who wish to continue with a 40-hour contract will have the option.

Some of you may ask, „Can Canyon afford this?“ Many companies‘ first reflex, including Canyon’s especially since JBL is on board, is „No, we can’t!“ What they’re really saying is, „Every euro I pay in salary reduces my profit.“ But instead, they come up with arguments like „This costs jobs – this isn’t the right time – we need money for investment – etc.“ Their job is to make as much profit as possible, and if no one objects, they get away with it.

Let’s not forget Roman, in whom we place our hope that he cares not only short-term profits but responsibly leading his company, his „baby,“ which is now at the top of the bike industry not only in terms of numbers.

Canyon is now making significant profits and can afford the collective agreements. Keep in mind: A collective agreement benefits not only employees but also the company. For example it helps to keep or attract skilled workers, which can definitively be regarded as a win-win situation.

If I were Mr. Roman Arnold, what would I prefer to hear about myself in a few years? Do I want to hear: „There’s Roman, who built an incredibly successful company in Koblenz, but the people at Canyon were left behind and need a second job to making a living.“? Or „There’s Roman, who built an incredibly successful company in Koblenz and is the best employer in the region because everything is just right for the people at Canyon.“? For me, it is not difficult to choose.

That’s why we – the IG Metall members at Canyon and IG Metall itself – say: Yes, Canyon can afford the standard – the collective agreements and its salary level. The products won’t get more expensive, and profits will still be more than sufficient.

For this reason, more and more Canyon employees have joined IG Metall. They know that our common goal cannot be achieved by a few but a strong community! We are now the majority in the warehouse and factory, and our supporters in the other departments are growing as well. We would like to represent the majority in all departments so that we can speak for everyone. After the general staff meeting, we communicated our call for collective bargaining with the management.

Overall, we are well aware of what an exceptional employer Canyon is in the region and the significance of the brand has in the cycling world. We believe it is crucial to reach a consensus constructively.

Therefore Mr. Ali Yener, the chief representative of IG Metall Koblenz, has sent an invitation to dialog to the management following the general staff meeting. Our goal is to make a joint effort and see Canyon become the best employer in the region.