German union poised to strike as industrial wage talks begin By Reuters

BERLIN (Reuters) – Germany’s largest industrial union, IG Metall, demanded a 7 percent pay rise for nearly four million workers in the country’s auto, electrical and metal industries as collective bargaining began on Wednesday.

WHY IS IT IMPORTANT?

IG Metall said it was prepared to strike alongside the talks, potentially putting more pressure on manufacturers already facing the threat of deindustrialisation as Europe’s biggest economy struggles to remain competitive as a business location.

Employers represented in the talks include some of Germany’s biggest industrial players, including Siemens, Mercedes-Benz ( OTC: ) and BMW ( ETR: ).

BY NUMBERS

IG Metall is demanding a 7% pay rise for around 3.9 million workers over a 12-month period and wants an extra €170 a month for trainees, pointing to the higher cost of living in Europe’s biggest economy Europe.

Germany’s Bundesbank expects inflation to reach 2.8% this year, down from 6.0% last year.

Business association BDI said around 20 percent of industrial value creation in Germany is under threat, citing high energy prices, labor shortages and lack of investment among the problems.

KEY QUOTE

“We are making extremely intensive preparations for a round of collective bargaining, including one with industrial action,” said Knut Giesler, IG Metall negotiator in North Rhine-Westphalia.

THE ANSWER

“The situation is serious, the collective bargaining partners must take responsibility,” said Angelique Renkhoff-Muecke, chief negotiator of the Bavarian Metal and Electrical Industry Association.

WHAT’S NEXT?

Wednesday marked the first round of negotiations in a number of states. Talks in the industrial heartland of North Rhine-Westphalia begin on Thursday.

Other rounds of negotiations will follow.

Unions could call strikes from October 29, when an agreement barring such action expires.