German Manufacturers Rebuff Union Demands for More Pay, Time Off

  • IG Metall wants 6% more pay, subsidized work-hour reductions
  • Employers say unions shouldn’t ‘patronize’ willing workers

Germany’s largest union failed to make significant headway with companies such as Daimler AG and Robert Bosch GmbH for its dual demands to raise wages by 6 percent and subsidize pay for workers seeking time to care for family. 

“There’s no visible progress from employers so far,” Roman Zitzelsberger, who heads IG Metall in the state of Baden-Wuerttemberg, said in Boeblingen Thursday ahead of the third round of wage negotiations. He urged employers to “make a significant step” toward a possible compromise in contract talks covering 3.9 million German workers.

After years of increasingly robust growth and record-low unemployment, worker representatives in Europe’s largest economy are pushing for wage gains as well as other perks in an effort to benefit from wider economic improvements. IG Metall, which typically has the potential to set higher demands than other unions given the importance of Germany’s industrial sector, has been in talks with employers since it laid out its request in October for more pay and an option to receive subsidies for reduced working hours to take care of kids or grandparents.

“Good and secure jobs can only be maintained if there are reasonable conditions,” Stefan Wolf, chief executive officer of car-parts supplier Elringklinger AG, said in Boeblingen. Wolf represents the employer organization Suedwestmetall in the wage talks. “We have a dramatic shortage of skilled workers, many people would like the work more and IG Metall shouldn’t patronize these people.”

To read more about Germany’s wage negotiations, click here.

To flex its muscle in the run-up to the talks, the union rallied about 250,000 people across Germany to halt work for about an hour in so-called warning strikes. It has threatened to escalate protests if the talks don’t go well.

At the talks, the two sides agreed to enter detailed discussions about individual aspects of a deal in which smaller groups of five representatives each from employers and the union would delve into the topics, according to Suedwestmetall spokesman Volker Steinmaier. IG Metall confirmed the decision.

Labor Bottleneck

German companies are increasingly having to hold back production due to lack of workers

Source: European Commission survey

Policy makers from governments to central banks are watching the talks closely, both in Germany and elsewhere. The concern is if the region’s most prosperous country can’t raise wages, less economically solid nations may face an even greater hurdle, complicating the European Central Bank’s efforts to boost inflation and eventually unwind stimulus measures.

For companies, the problem is that an already tight labor market makes it difficult to agree to workers’ requests for more free time. IG Metall has requested that workers be allowed to reduce their hours to 28 per week from 35 for two years.

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