Unionists in the eastern states of Berlin and Brandenburg won a settlement on the same terms four days later after some 1,500 workers stopped production in five plants to press for an agreement. Contract talks are still proceeding in the states of Saxony and Saxony-Anhalt.

In addition to the wage increase, the workers won a one-time payment of 120 euros ($108) for May, and a 3.1 percent wage increase for next year.

The agreement came after 10 days of one-day strikes by more than 100,000 workers, who paralyzed production in more than 88 plants in Baden-Wuerttemberg.

The settlement is expected to be adopted by the rest of the industry. Some 3.6 million workers in the auto, electronics, steel, and machinery industries in Germany are covered by the IG Metall union contract.

The bosses' federation had previously insisted that their offer of a 3.3 percent wage increase and a one-time payment of 190 euros was the best they could do. They claimed that any further increase would damage Germany's economic recovery and their companies' competitiveness, and threatened further job cuts if they were forced to pay more.

Otmar Zwiebelhofer, a negotiator for the employers, said at a press conference following the talks that as a result of the agreement, "firms will cut their costs more aggressively, rationalize their operations more intensely and look for cheaper suppliers abroad." Julian Callow, of Credit Suisse First Boston in London, called the increase high but "tolerable," asserting that "the pay increase can be met by productivity growth."

In the meantime, Germany's central bank announced May 21 a slight upturn in the country's economy of 0.25 percent in the first quarter of the year. The central bank also reported that in the same period German companies continued to reduce production capacity and use up inventories.

Talks are under way in the construction and printing industries, where workers have joined work stoppages to press their demand for a 6.5 percent wage increase. Members of the service employees union are also discussing strike action after rejecting a paltry 1.7 percent pay increase from the bosses.  
 
 
Front page (for this issue) | Home | Text-version home