IG Metall agrees wage deal for German auto and engineering workers

The deal, watched by the European Central Bank for its effect on inflation, comes at a tough time for Europe’s biggest economy.

Germany’s biggest industrial union reached an agreement with employers on Tuesday over a wage dispute within the country’s metal and electrical industry.

The new agreement by trade union IG Metall, the dominant metalworkers’ union in Germany, stipulated that wages will be increased in two stages by a total of 5.1%, plus a permanent increase in the collectively agreed additional allowance.

The ultimate wage increase will therefore be 5.5%, with the agreement having a term of 25 months.

It means 230,000 trainees in the sector will receive 140 euros more per month, with IG Metall emphasising that employees would have “more and better options between time and money” in the future.

The negotiations between the union and employers lasted 18 hours.

Some 3.9 million employees at companies including Mercedes-Benz, BMW, Siemens and Thyssenkrupp will be affected by the agreement.

IG Metall initially demanded a 7% wage increase over a period of twelve months, as well as more flexibility in terms of working hours. In response, employers had offered a wage increase in two stages of 3.6% over a period of 27 months.

Hundreds of thousands of employees across Germany have taken part in warning strikes over the last few weeks.