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ECONOMY

German Airbus plants hit by wildcat strike

Staff at three Airbus plants in Germany staged wildcat strikes Thursday over plans by the European jet maker to spin off the factories into a new subsidiary, a company spokesman said.

German Airbus plants hit by wildcat strike
Photo: DPA

The work stoppages hit the Varel and Nordenham facilities in northern Germany, coming on the same day as industrial action at a plant in the southern city of Augsburg belonging to the parent company EADS. Airbus sought a court injunction against the strikes in Varel and Nordenham.

The company aims to group the three sites with some 6,000 staff at the end of the year in the new EADS unit Premium Aerotec. The works council has called the terms of the deal for employees “unacceptable”. The company has asked staff to contribute to savings of €30 million ($38 million) in its operations, amounting to some €5,000 per worker.

Labour representatives say they should not bear the brunt of the restructuring programme, particularly without any guarantees from the company on jobs at the plants. The supervisory board of Airbus Germany plans to ink an agreement on the spinoff at a meeting Monday, works council officials said.

An Airbus spokesman declined to confirm the deadline but expressed confidence “that we will be able to reach a deal with the works council soon”. With the creation of the new subsidiary, Airbus plans to create the world’s biggest supplier for aeronautic structural components.

Airbus had originally intended under its vast Power 8 restructuring plan introduced last year to sell the three plants. But talks with the German company MT Aerospace failed earlier this year, as did attempts in France to sell the Saint Nazaire Ville and Meaulte factories. Plans for the new EADS unit Aerolia to assume the management of the two sites has also met with resistance from staff there.

The group has been hit by management instability, operational difficulties, and the strong euro, which makes its planes more expensive on international markets.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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