German industrial workers demand 5% pay rise ahead of tough talks

Germany's IG Metall union has demanded a 5% pay rise for roughly 3.7 million workers employed in the metal and electrical industry, the union said on Wednesday, as it gears up for difficult collective bargaining negotiations.

"We are approaching the negotiations with combative realism," said IG Metall chairwoman Christiane Benner in Frankfurt. "Instead of crisis rhetoric, attacks on social benefits and doom-mongering, workers expect secure jobs, compensation for rising prices and a fair share of corporate profits."

Unionists face tough talks next month as the economic situation in Germany's metal and electrical industry, the country's largest industrial sector, varies widely depending on the field.

Tens of thousands of workers in the key automotive industry protested against planned widespread job cuts on Monday, while business is booming in the electrical industry, as well as the rest of the transport sector thanks to increased government spending on defence.

The mechanical engineering sector is also struggling, but companies in the medical technology and aerospace sectors are doing well, according to IG Metall.

Benner accused employers of pretending that the industry-wide situation was worse than it actually is in order to avoid wage increases. "The metal and electrical sectors are more than just the car industry," she said.

Besides a wage increase to offset inflation, the union has also asked for a profit-sharing scheme for employees in "booming companies," while it also aims to negotiate measures to safeguard jobs and sites.

Negotiations on a new collective bargaining agreement, which the union wants to apply for 12 months, are due to begin on October 7.

Agreements currently in place are due to expire on October 31, meaning strikes could be on the cards from November.

Wage increases for workers at Volkswagen, Europe's largest carmaker which is planning to cut tens of thousands of jobs in the coming years and is mulling the closure of four of its German plants, are negotiated separately, with IG Metall also asking for a 5% pay rise.

Employers are likely to mount fierce resistance to the demands in light of the current economic situation. Following two consecutive years of recession, Europe's biggest economy only posted marginal growth last year, as businesses struggle with sluggish demand, high energy prices, international competition and new US tariffs.

Gesamtmetall, an organization representing the interests of employers, stressed that many companies in Germany could no longer operate profitably and don't have the luxury of negotiating the distribution of growth.

"For too many of our companies, their very survival is at stake," Gesamtmetall President Udo Dinglreiter said on Wednesday, adding that the current priority was to cut costs.

He accused the IG Metall union of ignoring the scale and depth of the crisis experienced by the industry.

Martin Brudermüller, supervisory board member at Mercedes, caused outrage among workers recently when he suggested a return to the 40-hour working week for the sector without increasing wages.

Mercedes has threatened to close two plans in case costs can't be cut.

In line with a previously negotiated agreement, workers in the metal and electrical industry currently work 35 hours per week, although that standard isn't legally binding.

During the last collective bargaining round in 2024, unionists managed to negotiate a 5.1% pay increase, at a time when many sectors were faring better.