At the end of the week things will get serious for the core of German industry. In the collective bargaining in the metal and electrical industry with its almost four million employees, the peace obligation expires on Friday.
From Saturday, warning strikes are possible, for example, at car manufacturers, machine builders or other metal companies. The action plans of IG Metall, which is demanding 8.0 percent more money, are already in full swing. The first shifts could be canceled as early as Saturday night (October 29th).
Before that, the regional negotiators in the tariff areas of Bavaria, Baden-Württemberg, the coast and central (Hesse, Rhineland-Palatinate, Saarland) will meet on Thursday for the third round. The employers’ association Gesamtmetall has so far left open whether and where an initial offer will be made or whether the demand for a zero round will continue to be maintained. The talks in the other tariff areas will follow on Friday, but the direction should already be clear on Thursday.
Real wage losses for the third year in a row
With 8.0 percent for a period of twelve months, the union has submitted the highest demand since 2008. At the same time, it is already clear that the expected inflation could not be compensated for even if the requirements were met in full.
In their autumn report, the economic research institutes expect inflation to rise by 8.8 percent in the coming year. For the third year in a row, employees in the high-wage metal and electrical industries are threatened with real wage losses. IG Metall is therefore also demanding effective state aid for employee households to compensate for the galloping prices for energy and other goods.
High inflation is causing problems for both companies and trade unions. In view of the high cost of living, one feels extreme pressure to end with a good result, said IG Metall boss Jörg Hofmann recently. “We have a lot of thermals in the companies on this question.” The union points to high profits, particularly in the auto industry, and full order books at most companies, which are quite capable of passing on their cost increases to customers.
Wolf warns of recession cancellations
Gesamtmetall President Stefan Wolf, on the other hand, emphasizes the extreme uncertainty of the companies regarding their supply chains and the shaky and expensive energy supply. The sometimes very high order backlogs are “not real” because numerous cancellations are to be expected in the upcoming recession, he said in a newspaper interview a few days ago.
Wolf sat down slightly from his zero round requirement: He described it for a scenario in which a lack of gas led to production stops and supply chain disruptions. “In such a case, of course, any distribution debate would be superfluous.”
Instead, Wolf showed what the employers want to achieve in the current negotiations: long term, automatic differentiation for weaker companies and use of the tax-free scope. Because the federal government has set an important framework for metal as well as for the following collective bargaining rounds:
Within the next two years, wage increases of up to EUR 3,000 can be made tax- and duty-free for each employee. The question of whether this will count towards one-off payments or permanent wage components in the metal and electrical industry is entirely open.
Biggest “gulp from the bottle”
The conclusion of the chemical industry a few days ago shows where the journey could go. Without any strikes, IG BCE and the employers agreed on a package of tax-exempt one-off payments and two percentage increases that will remain in the wage tables permanently.
Two times 1500 euros tax-free plus two levels of 3.25 percent each result in an average increase of almost 13 percent for a period of 20 months, according to IG BCE calculations. And although this is the biggest “gulp from the bottle” for the chemical workers in more than 30 years, it may not be able to fully compensate for inflation.
