Deal agreed to halt German strikes

Engineering employers feared the strikes could have led to heavy job losses

FRANKFURT, Germany -- The striking IG Metall union has reached a deal with employers to end one-day walkouts in a key German industrial region.

Observers hope the agreement will spare Germany a drawn-out and potentially damaging strike.

The accord, which covers 800,000 factory workers, was announced after daylong negotiations in Boeblingen in the Baden-Wuerttemberg region, The Associated Press reported on Wednesday.

Although wages in Germany are negotiated by region, unions and management informally designate one region as the pacesetter and other regional deals usually follow it closely.

Union spokesman Frank Stroh confirmed there was a deal to the AP, but did disclose of the size of any wage increase.

Pay strikes by IG Metall members spread on Monday to Berlin -- the first time such action has hit the German capital since the 1920s.

The Berlin action started with assembly line workers leaving the overnight shifts at DaimlerChrysler and other plants in the state.

About 100,000 workers took part in rolling walkouts last week and the union had pledged to expand its strike action to the east of the country this week if no agreement was in sight.

Talks broke off on April 19 in Baden-Wuerttemberg with the employers offering 3.3 percent for 15 months and the union holding out for 4.0 percent.

Union leaders said they wanted more money this year after settling for more modest increases in 2000 and 2001 after government and business appeals to take less to save jobs.

They say inflation ran ahead of those raises, and that they want to be compensated for increases in productivity.

Most contracts are negotiated between unions and employer associations representing entire sectors of the economy. IG Metall represents 2.7 million manufacturing workers across Germany in the auto industry, electronics and machine-building. It last struck in 1995 in Bavaria.

Economists said the rotating one-day stoppages staged by IG Metall could hurt the economy if it went on for weeks, and a high settlement could spur inflation and unemployment.

Chancellor Gerhard Schroeder had urged the sides to find a solution "that is sensible for the economy as a whole."