2 February 2004

STUTTGART – Germany’s most powerful labour union, IG Metall, resumed talks with representatives of the country’s biggest industrial groups Monday amid pinpoint strikes.

The metal employers’ federation has offered to gradually increase pay by 1.2 percent over the next 27 months, provided the unions accept the working week being restored to 40 hours without companies having to pay overtime.

Currently workers in western Germany work just 35 hours and those in the former communist east 38 hours. IG Metall went down to an historic defeat last year when it struck to reduce eastern hours.

This year the union is demanding a four percent rise for the next 12 months, and is not seeking changes to hours.

Separate talks were being conducted Monday in the several main regions including the industrial heartland of North Rhine Westphalia.

The key talks take place Thursday in Baden Wuerrtemberg state, where DaimlerChrysler is based. By long tradition, the deal struck in that state becomes a guideline for the rest of the country and regulates pay for 3.5 million workers in the engineering trade.

Economists have warned that a generous settlement could throttle Germany’s fragile upswing.

Retail sales in Germany fell 2.2 percent compared to a year earlier, as Christmas gift-giving failed to produce the usual pep. Incomes have fallen and Germans who are in work are often worried about losing their jobs and saving rather than spending.

Last year’s union defeat in the east has given employers in the main eastern industrial state, Saxony, greater confidence.

Bodo Finger, president of the Saxon Metal and Electric Industry Federation VSME, said in remarks reported Monday by the Frankfurter Allgemeine Zeitung that a four percent rise would lead to the loss of 12,000 jobs in his state alone.

Finger warned that he would refuse to apply a western bargain in his state if it were too generous.

Pinpoint strikes by 340 workers Monday briefly closed two factories in Hesse state in the west while up to 400 staff were set to walk off the job at a plant in Hanover belonging to Radio Frequency Systems (RFS), a maker of electrical cable.

The union has been careful in its rhetoric this year, offering to extend working hours in exchange for early retirement, with an “account” set up for each worker to regulate lifetime working hours.

DPA
Subject: German news