By Alexander Hübner and Ilona Wissenbach
MUNICH/FRANKFURT (Reuters) -Germany’s largest industrial union said on Tuesday that workers in the electrical engineering and metal industries would get a 5.5% wage increase over 25 months under a pilot deal struck with employers after a marathon 18 hours of tough negotiations.
The deal comes at a difficult time for Europe’s biggest economy, which is engulfed by a government crisis and has seen some of its biggest industrial icons ask for painful cuts in the face of rising competition.
Under the agreement, workers would get a wage rise of 2% from April 2025 and a further 3.1% from April 2026, said the IG Metall unions in Bavaria and the coastal region in Germany.
The rise falls short of the 7% increase sought by the union but is more than the employers’ offer of a 3.6% hike over a period of 27 months. In the previous round in late 2022, the sides agreed a 8.5% wage increase over two years.
The deal struck by local branches of the union is usually adopted nationwide for the 3.9 million workers in sectors covered by the talks.
The negotiator for the state of North Rhine-Westphalia, Knut Giesler, said the outcome was appropriate given the economic and political situation.
“It brings stability and security for employees and the economy…despite very different starting positions, we are in a position to find responsible and proper compromises,” said Giesler, adding that he would recommend his region accepts the deal.
The agreement comes a week before a third round of negotiations over wages and plant closures at Volkswagen, which has asked workers at its namesake brand to take a 10% pay cut, arguing labour costs are way too high.
A spokesperson for VW’s works council welcomed the IG Metall agreement but declined to comment on any possible effect on its own talks, saying he would speak about that before the next round of negotiations on Nov. 21.
The deal ends the prospect of strikes in the wider sector after more than 70,000 union members demonstrated on Monday in support of the union’s demand or stopped work for a few hours.
Among the demonstrators were 15,000 staff at Volkswagen’s Audi division in the southern city of Ingolstadt, with BMW and MAN Truck & Bus, a unit of Traton, also affected.
Under the deal, employees would also get a one-off payment of 600 euros ($637) by February and allowances for trainees would rise by 140 euros per month in January, said IG Metall.
For companies in a difficult situation, the collective agreement contains automatic differentiation options.
($1 = 0.9418 euros)
(Reporting by Alexander Huebner and Ilona Wissenbach; Additional reporting by Christina Amman; Writing by Madeline Chambers, Miranda Murray, Christoph Steitz; Editing by Friederike Heine, Kirsten Donovan)
