December 4, 2018 / 6:39 PM / 12 days ago

Germany's largest union demands 6 percent pay rise for steel workers

DUESSELDORF, Germany (Reuters) - German trade union IG Metall on Tuesday demanded a 6 percent wage increase for the 72,000 employees in the steel industry in the northwest of the country, firing the opening shot in next year’s wage negotiations.

FILE PHOTO - Flags of Germany's metalworkers' union IG Metall (IGM) are pictured past the IGM headquarters in Frankfurt May 3, 2012. REUTERS/Ralph Orlowski

IG Metall’s influential branch in western state of North Rhine-Westphalia (NRW) is also demanding an annual bonus of 1,800 euros, which workers could opt to convert into additional days off.

The demand by IG Metall, Germany’s largest labour union representing 3.9 million workers in the metal working and electrical sectors, could possibly set a benchmark for wage negotiations in the car and manufacturing industries.

Last year, the group demanded a similar increase and the right to shorter hours.

After hard-fought negotiations and strikes in Germany’s industrial heartland in the southwest, it reached a deal with employers that foresees a 4.3 percent pay rise and other payments spread over 27 months.

That deal was seen as marking the end of years of wage restraint in Germany, helping the European Central Bank as it tries to keep inflation close to its target and keeping it on track to curb its massive stimulus.

This year’s negotiations will happen against the backdrop of a cooling trend in Europe’s economic powerhouse, which is in its ninth straight year of growth.

U.S. TARIFFS

A generous wage deal would boost consumption and provide much-needed impulses to offset headwinds from weakening exports.

“The upward trend in the metal industry is persistent,” said Knut Giesler, head of IG Metall’s branch in NRW. “Capacity utilization this year stood at 90 percent, approaching the average rate in the years before the (2008) crisis.”

The first round of negotiations is set for Jan. 10.

The industry is feeling the heat of tariffs imposed earlier this year by U.S. President Donald Trump on steel and aluminium imported from the European Union. The European Commission and the U.S. government are trying to resolve a tariffs dispute.

Trump has also threatened to imposed tariffs on cars imported from the bloc.

Giesler said despite trade frictions, steel prices have risen by 80 percent over the last three years.

($1 = 0.8820 euros)

Writing by Joseph Nasr; editing by David Evans

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