Germany's metalworking sector huddles down for tough wage talks

14th January 2015, Comments 0 comments

Pay talks in Germany's key metalworking sector kicked off Wednesday, but with both sides far apart and the IG Metall union brandishing the threat of strikes, the stage was set for a fierce battle.

There was "no rapprochement" in the first round in the regional state of Bavaria, according to VBM, the employers' federation in the southern state.

"The economy is lacking momentum, the situation uncertain. Against this backdrop, IG Metall's demands are unrealistic. The union must take off its rose-coloured spectacles and face up to the realities," said VBM's chief negotiator Angelique Renkhoff-Muecke.

IG Metall is demanding pay rises of 5.5 percent for the nearly four million workers in sectors including electronics, the auto industry, household electrical goods and semi-conductors.

Its pay deals are used as a benchmark for much of German industry.

In the last round two years ago, the union used warning strikes and threats of all-out industrial action to secure a 5.5 percent pay increase for 20 months.

It is demanding the same amount this time round, but for one year, and is prepared to get tough with employers' federation Gesamtmetall.

The talks are carried out on a regional basis, starting with Bavaria and Baden-Wuerttemberg on Wednesday, followed by North Rhine-Westphalia on Thursday and then Lower Saxony and Saxony Anhalt later.

As soon as a deal is reached in one region, it is traditionally adopted in the other regions.

Hartmut Meine, the head of IG Metall's regional branch for Lower Saxony and Saxony Anhalt, warned that negotiations were likely to be "tough and abrasive".

The union was prepared to flex its muscles and "February could be a difficult month," Meine warned.

"Two rounds of talks are scheduled for January and it doesn't look now as if employers are ready to reach a deal very quickly," said Knut Giesler, head of IG Metall's branch in the state of North Rhine-Westphalia.

- Sabre-rattling -

At least until January 28, both sides traditionally have a period of "truce", after which IG Metall may seek to turn up the heat by calling for warning strikes.

In addition to the pay hikes, IG Metall is demanding improved rules regarding early retirement and part-time work for older employees, as well as workers' training opportunities.

In the sabre-rattling that normally proceeds the talks, employers have repeatedly cited the gloomy economic outlook as a reason to cap any wage increases.

By contrast, the union points to predictions that the German economy, Europe's biggest, will continue to grow, despite last year's slowdown.

"There isn't a lot of money to share around, as the growth forecasts show. We have to be very careful not to overburden companies," the head of the Gesamtmetall employers' federation, Rainer Dulger, said in a recent newspaper interview.

He predicted 1.5-percent growth for the sector at most in 2015, down slightly from 2014.

IG Metall's deputy chief Joerg Hofmann insisted that the union's demands were reasonable and affordable for companies and insisted that it was "only fair that employees participate in the prosperity they have helped to generate."

Germany, which practised wage moderation for much of the previous decade, is being urged by its European partners and even the European Central Bank to raise wages as a way of stimulating private consumption, currently the main driver of growth.

Starting from January 1, Germany introduced a new national minimum wage of 8.50 euros per hour, but the economic consequences of the move are still being hotly debated.

© 2015 AFP

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