IG Metall begins key wage negotiations

Germany's biggest industrial trade union IG Metall started wage talks with employers Thursday seeking an eight-percent pay hike for 3.6 million workers in the metalworking and electronics industries.

IG Metall begins key wage negotiations
Photo: DPA

The demand during the first round of pay negotiations is the highest the union has sought in 16 years and has jacked up tensions with industry as Germany faces an economic slowdown.

Representatives from IG Metall and the employers’ federation gathered in the western city of Darmstadt for talks that would initially cover the states of Hesse, Rhineland-Palatinate and Saarland for a 12-month period.

In Germany pay negotiations begin simultaneously in several regions and the first to reach an accord serves as a guideline for the rest of the country. Current pay accords in the auto, IT and household goods industries expire on October 31 so the outcome will be closely watched by all sides, including car makers like BMW, Mercedes and Volkswagen, and industrial giants like Siemens.

IG Metall argues that manufacturing workers have failed to benefit from several years of robust economic growth, and has threatened warning strikes from November if its demands are not met. “Conditions in the parts of the economy that produce goods and services are stable,” union chairman Berthold Huber told Frankfurter Allgemeine Zeitung on Thursday. “I am not saying things will keep moving upwards but I know that our much talked about traditional industry with its manufacturing output and force for innovation has moved this country forward. Look at countries such as the United States and Britain that have jeopardised it. It is a complete disaster.”

IG Metall estimates that profits in the metalworking and electronics

sectors soared 220 percent between 2004 and 2007. But employers group Gesamtmetall has blasted the union’s demand for an

eight-percent wage hike as “completely exaggerated” in light of a looming economic downturn. It has offered a smaller pay hike and a one-off payment.

The European Central Bank has also warned against too generous pay increases which could spur rising inflation. The negotiations are likely to be extremely acrimonious and set the tone for other pay settlements across Europe’s largest, export-driven economy.

Economy Minister Michael Glos said last week that the German government will have to “markedly revise downward” its economic growth forecast for 2009 – currently at 1.2 percent – due to the global financial crisis.


Environment: Germany aims for carbon-neutral steel by 2050

Germany on Wednesday pledged to help its steel industry become carbon neutral by 2050, as the coronavirus pandemic squeezes a sector already in a prolonged crisis.

Environment: Germany aims for carbon-neutral steel by 2050
Economics Minister Peter Altmaier at the Steel Action Plan conference on Wednesday. Photo: DPA.

It is important to act now so the steel industry “will still be competitive and environmentally friendly … in 30 years' time,” Economy Minister Peter Altmaier said.

A proposed plan includes new criteria for awarding public contracts, a minimum quota of low-carbon or carbon-neutral steel in finished products, and a new “green steel” label, Altmaier said.

Industry figures cited by the economy ministry suggest steelmakers will need an extra €30 billion ($34 billion) to become carbon neutral by 2050.

But the plan unveiled Wednesday did not include any new government subsidies.

Europe's steel industry has been hit hard in recent years by falling prices owing to global overproduction, especially by China, and by US sanctions introduced in 2018.

The coronavirus crisis piled on more pressure with a drop in demand from key sectors such as the auto industry.

German steel production has fallen by 10 percent since 2010 and the number of workers in the sector has dropped by 4,000 to 86,000.

Industrial giant Thyssenkrupp said in May it was looking for a partner for a possible merger of its steel division, after years of troubles including a blocked merger with India's Tata Steel.

As part of its coronavirus recovery plans, Germany unveiled in June a nine-billion-euro scheme to become the world leader in green hydrogen technology.

Berlin is betting that fuel produced from renewable energy sources can both reduce carbon emissions — including in steelmaking – and stimulate the economy.