UPDATE 2-E.ON workers to strike after wage talks fail

Fri Feb 1, 2013 8:55am EST

Related Topics

* Workers to strike from Monday, Feb. 4

* Unions call for 6.5 pct pay raise, E.ON offered 1.7 pct

* District heating will not be impacted - Verdi (Adds details, background, E.ON comment)

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF, Feb 1 (Reuters) - Workers at E.ON are planning the first strike in its more than 12-year history to start on Feb. 4, unions said, adding to pressures on Germany's top utility from economic stagnation and rising renewables.

"The strikes will begin on Monday," Volker Stueber, a negotiator at the Verdi trade union, said on Friday.

The unions aim to force E.ON to buy power on the market at higher prices and will not hurt consumers, he said, adding that every effort would be made to secure district heating for the population.

German utilities including E.ON, RWE and EnBW aim to control costs as they struggle with weak demand for electricity in Europe's economic slowdown, high gas prices and the loss of some nuclear reactors after the government decided to speed up Germany's exit from nuclear energy.

A growing supply of renewable power, furthermore, has cut into demand for their conventional fossil fuel generation and increased the volatility of wholesale power prices.

Verdi, in conjunction with mining union IG BCE, wants pay rises for 30,000 staff, for trainees to be taken on for at least 12 months after passing their courses, and for 250 permanent jobs to be awarded to successful trainees from 2015 onwards, among other points.

The unions have argued that forecast-beating earnings and net profit for the nine months to September would allow E.ON to pay higher wages to its more than 73,000 staff.

They seek a 6.5 percent pay rise, while E.ON has offered 1.7 percent.

The utility said earlier this week its earnings would fall this year and that it would be forced to close plants and sell more assets to cope with falling demand.

"We hope to resume negotiations ahead of a possible strike in order to reach a solution acceptable to both sides," Regine Stachelhaus, E.ON board member in charge of human resources, said in response to the announcement.

E.ON peer RWE also faces a possible strike after trade unions earlier this week ended negotiations, saying no progress was made regarding wage demands. Unions at RWE are due to decide next Tuesday whether or not to take industrial action.

A strike would hit power supply in Germany during the demand-intensive winter months.

Germany needs to produce power equal to over 80 gigawatts of network load on cold winter days to meet demand, or it must import from neighbours or go short of supply. (Editing by David Holmes and Jane Baird)

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