German Chemical Industry Union Wants 5.5% Raise

German chemical workers to demand 5.5 pct pay rise

Thu Nov 28, 2013 11:00am EST

 

 

 

* Union says business optimism at 2-1/2 yr high

* Disputes "board room whingeing"

* Employers reject demands, citing lower productivity

By Ludwig Burger

FRANKFURT, Nov 28 (Reuters) - German chemical industry workers are to demand a 5.5 percent pay rise when negotiations open next month, their union said on Thursday, citing improving business conditions.

Germany's historically low wage inflation has been viewed by some euro zone politicians as a problem, blaming it as a source of imbalances in national economies across the region that exacerbated the sovereign debt crisis.

But manufacturing workers represented by the IG Metall union secured a major collective pay deal in May, with 3.7 million engineering, metal and electrical sector workers getting a 3.4 percent rise from July followed by a further 2.2 percent rise in May 2014.

German annual inflation unexpectedly accelerated to 1.3 percent in November from 1.2 percent the previous month, preliminary data showed on Thursday.

"There is whingeing in the chemical industry board rooms but the pessimism is not reflective of the reality," said the IG BCE union, which represents some 550,000 chemical workers. It pointed to an index measuring business confidence rose last week to its highest level since early 2011.

The union and employers agreed to a 4.5 percent pay rise in May 2012 but that deal expires between Dec. 31 and Feb. 28, depending on regional variations.

The industry's employers association BAVC rejected the demands, saying that such a raise was "far from" realistic.

It added that German output volumes in chemical and plastics were below the levels of the 2008/2009 economic crisis, also citing sluggish growth and declining productivity.

"Higher labour and energy costs massively increase the competitive pressure on the companies," it said.

German chemicals trade group VCI this month predicted 0.5 percent sales growth this year, cutting its outlook for the third time this year on lower prices and a sluggish export business.

The largest German chemical companies are BASF, Evonik, Bayer and Lanxess.

Major foreign producers such as Dow Chemical, DuPont and LyondellBasell also operate sites in Germany, which is Europe's largest chemical producing nation.

http://www.reuters.com/article/2013/11/28/germany-wages-idUSL5N0JD2L620131128