German Union IG Metall Wins Wage Increase After Threat Of Strikes

The IG Metall union, which works with automakers like DaimlerChrysler and Volkswagen, won a 5.8 percent wage increase following five rounds of intense talks and threats of walkouts.

SINDELFINGEN, Germany (AP) - Germany's powerful IG Metall union claimed a major victory Friday after it reached a deal with industrial employers to increase wages a total of 5.8 percent over 19 months, union representative Juerg Hofmann said.

Though the deal itself was made for workers in the Baden-Wuerttemberg state and affects just 800,000 members, an agreement for one region typically sets the precedent for the rest of the country, along with the rest of IG Metall's members.

Already, several other German states said they would likely implement the agreement, which stands to benefit some 3.4 million German workers.

The deal came after a fifth round of intense talks that started on Thursday and lasted through the night into Friday and averted the threat of a nationwide walkout in Europe's biggest economy. IG Metall had sought a 6.5 percent increase.

''IG Metall is happy with this increase, but this would not have been possible without the massive participation in the warning strikes,'' Hofmann, head of the union's Suedwest division, told reporters, referring to the waves of brief walkouts that began last Saturday and were held across the country.

Hofmann described the more than 20 hours of talks as ''difficult,'' and acknowledged the union was forced to compromise, but insisted it was pleased with the outcome.

''We have achieved what we set out to achieve,'' Hofmann said.

Under the terms of the agreement, workers will receive a one-time payment of $545 this month and then their wages will rise 4.1 percent starting in June for 12 months. In June 2008, wages will increase 1.7 percent for another five months, making the overall total increase for the 19-month deal approximately 5.8 percent.

The companies whose employees belong to the IG Metall union are a who's who of German industry, including automakers DaimlerChrysler AG, BMW AG and Volkswagen AG, as well as Siemens AG and MAN AG, among others.

The deal is not expected to rile concerns about inflation that have been raised by the European Central Bank because of the way it is spread out over so many months.

The union had threatened to call a full-blown strike if it was not able to secure a significant wage increase for its members. It rejected an offer employers made last month of a 3 percent increase - made up of a formal salary rise of 2.5 percent and a half-percent ''economy bonus.''

More than 300,000 workers walked off their jobs briefly in a rash of warning strikes ahead of the talks in an effort to keep the pressure on employers for what they say is their share of Germany's recent economic upswing.

In a separate development, Germany's largest services union, ver.di, said it would know by Thursday if its members want to stake a strike against Deutsche Telekom AG.

The union last week rejected the telecommunications company's offer to delay layoffs at its T-Service unit until 2011 in exchange for subsequent wage cuts by 9 percent until 2010 and an increase of work hours to 38 per week.

Deutsche Telekom said it offered to drop its demand that staff must work up to 100 hours overtime to fill the gaps during busy times. So far, there have been three brief strikes by workers, lasting no more than a few hours, but if the strike is approved it could lead to a major walkout.

The labor talks come at a bright spot for Germany. Unemployment is below 10 percent for the first time since 2002, production is on the rise and optimism among both businesses and consumers is reaching new highs. The government has also raised its forecast for 2007 economic growth for the second time this year, predicting that gross domestic product would increase by 2.3 percent.


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