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Forget Concessions, German Auto Workers Demanding Massive Pay Hikes

Unions warn of serious confrontations.

by on May.10, 2012

A BMW 5-Series model rolls down the assembly line near Munich.

German carmakers are negotiating new contracts with unions representing employees in what have become the most confrontational wage talks in well over a decade.

German unions negotiate with employer groups in different regions of the country IG Metall, the German metalworkers union staged a brief, one-day warning strike around Stuttgart, the home of Daimler AG and Porsche.

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Warning strikes are a ritual part of labor negotiations in German but this year they have an extra edge and union leaders have warned of more serious confrontations next week if the car makers and major supplier, such as Bosch, don’t meeting their wage demands.

The unions are looking for a hefty 6.5% wage increase this year and they gained some extra leverage when the major public employee union in Germany negotiated a substantial pay increase.

According to German news magazine Der Spiegel, autoworkers employed at Audi in Ingolstadt get the equivalent of $4,400 per month while working a for 35-hour week.

But the discrepancy between top management and the pay of the typical auto worker continues to grow and is helping fuel the demands for a major wage hike. Audi CEO Rupert Stadler’s salary was also probably record-breaking, climbing 73% last year to reach 7.6 million euros, according to Der Spiegel.

The ongoing collective, however, won’t have much impact on German auto industry’s growing use of lower-pay temporary and contract workers, just like at auto plants in the United States.

German carmakers, meanwhile, remain mum about the ongoing negotiations. The company’s side of the negotiations are handled by the employers association and custom is not to discuss the talks until the
final deal is sealed. The old rules still prevail, sources said.

Meanwhile, observers expect union members to win pay increases, though the prospects for those at the lower end of the pay scale are limited.

Employer representatives have made it clear that they will resist IG Metall’s demand to be given more of a say in the use of contract workers and employees hired through special contracts.

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