Great Reboot

German IG Metall, employers confirm 4.3 percent wage deal

SINDLEFINGEN, Germany (Reuters) - A key regional branch of Germany’s IG Metall union reached a deal with employers for a 4.3 percent wage increase over 12 months to April 30, 2013 after an all-night negotiating session ended early on Saturday, officials said at a news conference.

The deal reached just before dawn will set the benchmark for 3.6 million engineering workers nationwide, Europe’s largest industrial union.

Officials from the two sides confirmed the breakthrough agreement at a news conference after Reuters had earlier quoted sources leaking the broad outlines of the deal.

The agreement in the southwestern town of Sindlefingen takes effect retroactively from April 1 and covers a 13-month period but the 4.3 percent wage increase will only take effect from May 1 and cover 12 months, officials said. Workers will receive no raise for April 2012.

The officials added their deal will be used as a basis for wage increases for IG Metall workers nationwide.

It ends weeks of partial walk-outs and warning strikes to press home the union’s demands for a 6.5 percent pay rise. Employers had previously offered a pay rise of just under 2.6 percent.

Baden-Wuerttemberg is home to German manufacturers including Daimler and Heidelberger Druck, and engineering wage deals there traditionally set the tone for agreements across the rest of the country.

While wages in the crisis-hit euro zone periphery are falling, German workers are enjoying the benefits of a robust economy and a healthy labor market after a decade of wage restraint, in turn fuelling the economic divergence that has underpinned the currency area’s debt crisis.

Reporting By Hendrik Sackmann; writing by Erik Kirschbaum