Germany chemical employers reject union call for 6-7% wage hike

07 December 2010 17:10  [Source: ICIS news]

TORONTO (ICIS)--Germany’s chemical employers on Tuesday rejected a demand by chemical union IG BCE for a 6-7% wage increase next year.

Hans Paul Frey, general manager of Wiesbaden-based chemical employers trade group BAVC, said the union’s demand went “far beyond” what was acceptable in the current economic circumstances.

Workers should not allow themselves to be deceived by the recent strong growth data in the chemical industry, he said.

“We have not yet achieved a genuine recovery as we are still below pre-crisis performance levels,” Frey said.

Also, while many large chemical producers had recovered, a number of medium and smaller-sized firms were still struggling with the fallout from the crisis, he said.

BAVC, for its part, was preparing for a difficult 2011 collective bargaining round, Frey added.

IG BCE head Michael Vassiliadis said earlier that Germany’s overall economic position was “good,” and the chemical industry was doing even better.

“Germany has overcome the recession faster than other countries, we are in a recovery,” he said.

After workers had made concessions during the crisis, they now wanted to see their contributions reflected in higher wages for 2011, he added.

IG BCE was aiming for 12-month collective contract with a 6-7% wage increase, he said.

Economists told German media they expected a “hefty wage hike” of more than 3.0% in the chemical industry for 2011 after a number of politicians had come out in favour of strong wage hikes to boost domestic demand.

Economics research institute DIW said recently that Germany needed to do more to boost domestic demand. DIW argued for wage increases, in particular in the country’s export industries.

Collective bargaining for some 550,000 workers in Germany’s chemical, pharmaceuticals, plastics and rubber industries are expected to begin in February.

Under the existing collective wage deal for 2010, chemical employers and IG BCE agreed a wage freeze.

In 2009, in the midst of the crisis, Germany’s chemical industry workers received a 3.3% wage increase under a two-year collective deal that dated from 2008.

Meanwhile, Germany’s chemical production is forecast to grow 11% this year, even though production growth slowed in the third quarter, according to the country’s chemical producers group VCI. In 2009, production declined 10% from 2008.

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