German manufacturers to defuse labour spat

Bloomberg

Daimler AG, Siemens AG and other German manufacturers are under pressure to make concessions to employees as more disruptive walkouts loom in a contract dispute over wages and work hours.
At talks, the IG Metall union is pushing employers to raise pay
6 percent and subsidise wages for workers reducing hours to care for kids or older family members. Emboldened by robust growth and record-low unemployment, labour representatives have threatened 24-hour stoppages after rallying more than 700,000 people for protests in recent weeks.
“The clock is ticking on further escalation,” Olivier Hoebel, IG Metall’s negotiator for Berlin, Brandenburg and Saxony, said.
IG Metall is planning to meet on Thursday to discuss the state of negotiations and map out its next moves, which could lead to costly production stoppages.
Aside from the short-term
disruption from potential shutdowns, economists are concerned about the longer-term impact of wage stagnation. If the region’s most prosperous country can’t increase pay, others may face an even greater hurdle. That would complicate the European Central Bank’s efforts to boost inflation and eventually unwind stimulus measures.
Workers and employers in Germany’s influential manufacturing sector are locked in a power struggle. Labour leaders want a sizable pay raise as well as more work-life balance for staff, while employers worry about keeping production lines running amid an increasingly tight market for skilled workers.
IG Metall, which typically has the potential to set higher demands than other unions given the importance of Germany’s industrial sector, has been in talks with employers since it laid out its request in October for more pay and an option to receive subsidies for reduced working hours to take care of family.
For companies, the problem is that a tight labour market makes it difficult to agree to workers’ requests for more free time.