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German labor talks continue
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February 16, 1999: 12:22 p.m. ET
Unions and employers locked in talks in last-ditch effort to avoid strike
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LONDON (CNNfn) - Germany's largest union was holding last-ditch talks with employers' representatives Tuesday in a bid to avert a strike, which could have profound implications for the German economy.
Trade unionist leaders at IG Metall were trying to hammer out a compromise with Gesamtmetall, the German engineering employers federation, before the union's self-imposed deadline of midnight (8:00 a.m. EST) Wednesday.
The two sides were being guided through the talks in the small town of Boeblingen, near Stuttgart, by an independent mediator. The use of external arbitration is a first for the engineering sector in Germany.
The country's and Europe's largest union, which represents some 3.2 million workers nationwide, threatened to call a strike after employers offered a pay settlement of 2.3 percent, plus a one-time 0.5 percent profit-related payment. This fell far short of IG Metall's demands of a 6.5 percent pay rise.
The arbitrator, Hans-Jochen Vogel, sounded a cautious note before the talks started. "I'm realistic. [Being] realistic is much more important than [being] optimistic," he told Reuters.
The employers were equally measured. "The [two sides'] positions are still very far apart," employers' representative Klaus Fritsche told German daily Die Welt.
IG Metall's chief negotiator, Berthold Huber, appeared more optimistic a deal would be reached. He told German radio Tuesday: "Our demands are realistic, but of course we have already signaled to the employers that the 6.5 percent pay rise is negotiable," Reuters reports. "I will not name exact figures, though we expect the final figure to be above 4 percent," he added.
IG Metall is threatening a strike vote by its 840,000 members in the southwest German state of Baden-Württemberg, the home of DaimlerChrysler and sport-car maker Porsche.
The talks are of wider significance because any wage deal that results would act as a blue print for a national pay settlement.
Any escalation of the dispute could wreck plans by German Chancellor Gerhard Schröder for his "Alliance for Jobs" project, which is intended to bring together employers and unions to tackle the country's rising unemployment rate, which stood at 10.9 percent in December. 
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