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German Workers Strike to Push For Wage Increase

More than 60,000 workers in Germany's engineering and metalworking sector took part in temporary stoppages on Wednesday, turning up the pressure on employers the day before a key round of wage negotiations.

Germany's biggest industrial union, IG Metall, said that by early afternoon about 61,000 had joined warning strikes across the country in support of its demand for a 6.5% pay increase for the 3.4 million workers who work in the sector.

Carmakers DaimlerChrysler, Porsche and Audi, truckmaker MAN and French-American telecoms equipment company Alcatel-Lucent, were among firms hit by stoppages, the union said.

A fifth round of wage negotiations between IG Metall and employers is due to be held on Thursday, and the head of employers' group Gesamtmetall reiterated on Wednesday he hoped a deal would be reached soon.

"All the arguments have been exchanged, all building blocks for a solution are on the table," Gesamtmetall chief Martin Kannegiesser told the Frankfurter Allgemeine Zeitung daily.

"We are ready (for a deal) and expect the same from IG Metall. Whoever really wants a solution needs to be able to find one at short notice," he said.

Employers have so far offered workers a 2.5% fixed pay raise, plus a one-off sum equivalent to a 0.5% rise.

IG Metall has rejected this, saying that less successful industries like construction and the chemicals sector have already secured bigger wage increases this year.

Analysts expect IG Metall to push for a rise of at least 4% due to big productivity gains the industry has made in recent years. Employers are expected to resist such an increase unless the contract lasts significantly longer than 12 months.

The European Central Bank has urged unions to accept moderate pay rises or risk boosting inflation.

Domestic Economy

Jutta Blankau, IG Metall's head in the north German coastal region, told NDR radio that after years of scant wage growth, the domestic economy would suffer if workers did not secure a bigger share of the fruits of Germany's recent revival.

"The problems we have in Germany have a lot to do with the domestic economy, which is starting to pick up, but people need money again in order to act as consumers here," she said.

Union demands for better pay were bolstered by the country's strongest gross domestic product growth in six years in 2006 -- 2.7%. The country's leading think tanks have forecast only a marginal slowdown in growth through 2008.

IG Metall has threatened to ballot members over large scale industrial action if no deal is in place by mid-May.

On Wednesday around 30,000 workers downed tools at firms in Baden-Wuerttemberg, the southwestern state where in the past a pilot wage deal for Germany has been struck.

Joerg Hofmann, IG Metall's head in the state, was quoted as saying on Wednesday the union might accept an 18-month pay contract with two staggered wage rises as a compromise.

"I could imagine an 18-month contract up to September 2008 which would certainly have to contain two separate percentage increases," the Stuttgarter Zeitung paper quoted him as saying.

Thousands staged temporary walk-outs in Bavaria, with carmaker BMW and industrial conglomerate Siemens among the companies affected. A further 9,000 followed suit in the western state of North Rhine-Westphalia.

IG Metall said it would step up pressure on employers on Thursday as pay talks get underway again. More than 100,000 workers would participate in stoppages then, it said.

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