German union to extend strike

March 29, 2002 Posted: 7:14 AM EST

IG Metall strike threatens to disrupt production at car manufacturing plants

BERLIN, Germany - Germany's second largest union has threatened to extend its strike action to other parts of the country in its bid for higher wages.

Engineering union IG Metall, which has 2.8 million members, called out workers in western Germany on Friday to join in hour-long stoppages that began this week in the eastern part of the country.

While most business are closed on Friday for the Easter holiday, IG Metall spokesman Claus Eilrich said the union would initially target companies with 24-hour operations, followed by more action when next week.

"It will of course hit the large carmakers and the big players in the mechanical engineering and electronics sectors,'' Eilrich told Reuters.

IG Metall is demanding wage increases of about 6.5 percent, despite warnings from economists and Chancellor Gerhard Schroeder that any hefty pay rise could hurt Germany's economy, which has been struggling to recover from a recession.

There are also concerns that wage hikes could fuel inflation and prompt the European Central Bank to raise interest rates.

Martin Kannegiesser, head of the Gesamtmetall employers federation, said a wage increase of three percent or more would be "extremely dangerous.''

Schroeder, who is facing an election in September and has been widely criticised for his handling of the economy, has urged unions lower their wage demands.

"My hope is that a deal can be reached without a strike... [and avoid] a deal that could trample down the shoots of recovery,'' he told Der Spiegel magazine.

German employers have offered the unions wage increases of 2 percent, in line with the country's current rate of inflation, for this year and 2003. The unions have said the offer is unacceptable.

"We expect, at the latest after Easter, that the employers will put a better offer on the table,'' Eilrich said.

Full-scale strikes could be called in late April if no settlement has been reached.

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