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UPDATE 1-German engineering workers go on strike seeking higher pay
May 2, 2013 / 2:26 PM / 4 years ago

UPDATE 1-German engineering workers go on strike seeking higher pay

(Updates with numbers of workers on strike, adds IG Metall chief’s quote)

By Ilona Wissenbach

FRANKFURT, May 2 (Reuters) - Almost 50,000 metal and electrical workers at more than 100 firms went on strike in Germany on Thursday to press employers to raise their pay offer, engineering union IG Metall said, adding there would be further industrial action in coming days.

Germany’s biggest industrial union is calling for wage hikes of up to 5.5 percent for some 3.7 million workers from May. It has so far rejected an offer from employers to increase wages by 2.3 percent from July following two months without a raise.

“It’s not enough. IG Metall expects an offer that will enable us to come to an agreement. That’s why we will keep up the pressure,” said Berthold Huber, head of IG Metall.

A rise in the German workers’ wages could provide some timely respite for struggling euro zone states by boosting domestic demand and thus imports. That would help Germany show it is doing its part to foster growth in the euro zone.

IG Metall said by midday more than 26,500 employees had laid down their tools in the southwestern state of Baden-Wuerttemberg, an industrial hub that is home to leading carmakers such as Daimler and Porsche.

At Daimler’s plant in Sindelfingen almost 10,000 employees stopped work temporarily. IG Metall said the disruption to the early shift alone had resulted in between 300 and 400 fewer cars rolling off the production line.

IG Metall regional leader Joerg Hofmann said the offer employers had put on the table would not increase workers’ purchasing power and had simply provoked conflict.

“Employers want to protect their rate of return by freezing real wages,” he said in a speech at the factory gate, adding firms had made more than 50 billion euros in profit last year.

Last year IG Metall clinched its biggest pay rise in 20 years - a 4.3 percent wage hike spread over 13 months - after a pilot agreement was reached in Baden-Wuerttemberg.

Regional employers’ association Hessenmetall said the strikes were unnecessary, given firms’ readiness to negotiate.

“There is no reason to resort to the costly business of waving red flags,” Chief Executive Volker Fasbender said.

FALTERING ECONOMY

While unions argue wage hikes would boost the economy by increasing consumer demand, employers say the economic outlook has weakened significantly and workers should therefore moderate their demands to avoid job cuts.

“We must guarantee jobs rather than laying down tools,” said Thomas Lambusch, lead negotiator for regional employers’ association Nordmetall.

A survey showing Germany’s private sector contracted in April, combined with a drop in business and investor sentiment, suggest the German economy had a shaky start to the second quarter of 2013, though consumer sentiment brightened heading into May and the jobless rate is near a post-reunification low.

German firms have also been hit by a slowdown in China, which had proved an important alternative market for German exports during the euro zone debt crisis so far.

IG Metall wants to secure at least a 3 percent wage hike for its members. In other sectors of the economy wage deals of up to 6 percent have been agreed.

The next round of wage talks in the metal and electrical industry are set for May 7 in Baden-Wuerttemberg and May 8 in Bavaria. The first region to secure a deal usually sets the tone for the rest of the sector.

Years of wage restraint, combined with labour market reforms, helped turn Germany - once described as the “sick man of Europe” - into an economic success story but paychecks have edged higher in the past two years.

Data from the statistics office shows German private sector workers earned 32 percent more than the European average per hour in 2012, though their wages still lagged those of Scandinavian countries, the Netherlands, Belgium, Luxembourg and France. (Writing by Michelle Martin, editing by Gareth Jones)

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