German Metalworkers, Employers Suspend Talks Amid Impasse

IG Metall, Europe’s biggest manufacturing union, and Germany’s industrial employers suspended a fifth round of talks on pay and hiring amid an impasse over temporary contracts and apprenticeships.

Negotiations will resume May 18, IG Metall said in an e- mailed statement today from its Stuttgart-based office in Baden- Wuerttemberg state, where the latest round of talks with Suedwestmetall, the manufacturers’ association in the region, lasted 20 hours.

“We have made progress, but not yet sufficient progress,” Joerg Hofmann, the union’s leader in the state, said earlier. “We still have no enduring solutions in sight as regards the issues of temporary workers and guarantees of permanent contracts for people completing apprenticeships.” The sides have yet to discuss a 6.5 percent wage demand by the labor union, Hofmann said.

German workers are seeking above-inflation wage increases as they negotiate a bigger share of the rebound in Europe’s biggest economy, underscoring the divergence between Germany and the rest of Europe as the debt crisis rages.

The German economy grew 0.5 percent in the first quarter of 2012 after shrinking 0.2 in the last three months of 2011, the Federal Statistics Office in Wiesbaden said yesterday. Factory orders and industrial production both rose more than economists forecast in March.

Euro-Nations’ Recession

The debt crisis has already pushed eight euro-area nations into a recession, commonly defined as two consecutive quarters of contraction, with Spain’s economy the latest to succumb, according to statistics released yesterday.

As European car sales slid for a seventh consecutive month in April, registrations in Germany, the continent’s largest auto market, increased 2.9 percent to 274,066 vehicles, the Brussels- based European Automobile Manufacturers’ Association, or ACEA, said today.

IG Metall is demanding a 6.5 percent wage increase for the 3.6 million metalworkers across Germany. The union also wants more say over temporary employment and guarantees of permanent contracts for people completing apprenticeships.

Baden-Wuerttemberg in Germany’s southwest is home to companies including Daimler AG (DAI), Porsche SE (PAH3) and Robert Bosch GmbH, and is the union’s benchmark region for contracts nationwide. Negotiations in other tariff regions have been paused pending the talks in Baden-Wuerttemberg, according to IG Metall.

Wage Talks

Suedwestmetall is offering a 3 percent raise over 14 months for the 800,000 people employed in electronics and metalworking in the state of Baden-Wuerttemberg.

“I am confident that negotiations will continue on Friday at 10 a.m.,” Rainer Dulger, Suedwestmetall’s chief negotiator, told reporters. “We have made considerable progress. We have not yet spoken on salary raises. I strongly believe that we will be able to talk on pay at the next negotiation round.”

Martin Kannegiesser, the president of Germany’s metal industry association, and Berthold Huber, IG Metall’s chairman, joined the talks early this morning, suggesting that negotiations have entered the final phase.

Since April 30, 750,000 workers have participated in warning strikes, IG Metall said yesterday in an e-mailed statement. The temporary walkouts have resulted in 150,000 work hours lost and cost Baden-Wuerttemberg companies an amount in the “high double-digit” million range in sales, according to Suedwestmetall. Workers don’t get paid for the hours they go on strike.

Schaeuble Defends

German Finance Minister Wolfgang Schaeuble defended labor leaders’ pay demands in an interview published by Focus magazine on May 5. The country’s businesses can afford higher raises than other European nations because Germany has undergone years of political and economic reforms already, Schaeuble was cited as saying.

Ver.di, the main labor union for non-manufacturing workers in Germany, won agreements in late March for as much as a 6.3 percent pay increase by the end of 2013 for state and municipal employees.

To contact the reporter on this story: Joseph de Weck in Frankfurt at jdeweck@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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