Germany’s largest union seeks 5 percent pay rises despite industry woes

Europe’s biggest economy has been stagnating for years as weak demand for its key exports, US tariffs, Chinese competition and high energy costs weigh on industry.

But IG Metall, which has over two million members in sectors from car-making to factory equipment, shipbuilding and electronics, said it would not be intimidated by employer warnings that costs had to come down.

Union chief Christiane Benner told a press conference that she could not accept “rhetoric making out there is a general crisis”.

“Workers deserve better than that,” she said. “We cannot accept threats of relocating plants.”

The five percent demand would cover inflation since the last round of negotiations concluded in 2024, Benner said.

READ ALSO: Can Germany save its car industry as job cuts intensify?

German inflation has accelerated in recent months, hitting 2.9 percent in August, on the back of rising energy prices amid the US war against Iran.

Benner also hit out at predictions of doom and gloom from employers, which she said were an effort to restrain pay.

“The metal and electrical industries have the strength to remain Germany’s core sector and the beating heart of its industry,” she said.

While many sectors have been cutting jobs in recent times, the auto industry has been particularly hard hit.

Volkswagen is cutting 100,000 jobs by the end of the decade to try and compete with Chinese rivals, and the future of four plants in Germany is unclear.

Mercedes-Benz warned workers this week that two plants could close if the company does not get costs under control.

Speaking separately as automotive supplier Bosch unveiled half-yearly results, the company’s finance boss Markus Forschner said he expected give-and-take in pay talks.

“We are counting on our partners to take forward-looking decisions in the forthcoming negotiations,” he said.