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Germany: Labor Unrest Could Endanger Government's Electoral Chances

  • Roland Eggleston

Some 50,000 German industrial workers have gone on strike today in the first major labor action in Germany in seven years. Today's strike, concentrated in the country's southwest industrial region, is expected to kick off a rolling campaign of one-day strikes throughout the country as engineering and electrical workers demand higher wages. Commentators say the strikes are an election-year embarrassment for Chancellor Gerhard Schroeder and could weaken his chances of retaining office when the country holds national elections in September.

Munich, 6 May 2002 (RFE/RL) -- Today's strikes -- which expect to see 50,000 workers walk off their jobs at 21 companies in southwest Germany -- were called by IG Metall, the country's largest industrial union, which represents 2.7 million workers in the metal, engineering, and electrical industries behind the majority of German exports.

IG Metall leader Klaus Zwickel says the union wants workers' wages increased by more than 4 percent -- a compromise stance after the union's original demand of 6.5 percent. Employers, however, argue they can only afford a 3.3 percent increase, citing Germany's sluggish economy. Talks between the two sides broke down last month, with Zwickel quoted as calling the 3.3 percent offer a "provocation." Today's one-day strikes have hit a number of top manufacturers near Stuttgart in the German state of Baden-Wurttemburg, including DaimlerChrysler, which produces more than 2,500 Mercedez-Benz luxury automobiles a day at its Stuttgart plant.

The Porsche auto plant is also a target of the strikes. In an interview today, Zwickel said: "Porsche says it is making good profits. It can afford to pay more."

But the president of the region's employers' federation, Ottmar Zwiebelhofer retorted angrily, saying, "Not every factory is a Porsche and many middle-level industries are barely making a profit." Zwiebelhofer pointed to economic reports showing that the German economy is one of the weakest in the European Union and heavily dependent on exports, particularly automobiles.

An additional 50 plants in Baden-Wurttemburg are expected to shut down for a day of strikes later this week. The rolling strikes are expected to spread next week, with IG Metall expected to target Berlin and the state of Brandenburg.

Zwickel says the strikes will continue until employers return to the negotiating table: "We want the employers to return to the negotiations. That is what we are demanding and that is the primary goal of this strike." The union leader also says he wants the strikes to hit employers hard. He told reporters, "The more painful the strike, the quicker the employers will give ground."

But Zwiebelhofer of the employers' federation says his members want to limit the damage as much as possible and have agreed not to retaliate with lockouts: "We agreed four weeks ago not to use our retaliatory weapon -- a lockout. We want to keep the damage as limited as possible." Zwiebelhofer says he believes it could be two weeks before employers and union members agree to resume the wage negotiations.

Labor experts say the main risk the current unrest poses for Germany's weak economy is not the strikes themselves, but the possibility that they could lead to a much higher wage settlement.

Daniel Edlund, a Munich economist, says, "A wage increase of more than 4 percent could push up inflation, making it more costly for firms and opening the way to layoffs."

At a Cologne think tank, the Institute for the German Economy, economist Hagen Lesch said a prolonged wave of strikes could have negative consequences, and not only because a big wage increase could lead to many people losing their jobs.

More worrying, in his view, is that a big increase in pay for IG Metall could set a precedent for the demands of unions in other sectors. The service industry's union, Verdi, is already demanding a 6.5 percent wage increase. Similar demands are coming from the building industry, which is also threatening strike action.

German labor costs are already among the highest in the world. In 1999, the average hourly labor cost was 25 euros ($23). The Cologne think tank says this is nearly 40 percent higher than the average in other industrialized countries.

Most of the difference stems from nonwage costs like insurance and pension contributions. The employers' federation has estimated that in order to ensure a take-home pay of about $2,000, the employer must more than double that amount in gross salary to cover these nonwage costs.

Political analysts say the strikes are an embarrassment for German Chancellor Gerhard Schroeder, who faces what is expected to be a difficult national election in September. Polls already show Schroeder's Social Democrats lagging behind their challengers, the Christian Democrats. A protracted strike could worsen the situation even further.

Schroeder made several appeals to IG Metall to forgo the strike, and last week met with the union leadership. Schroeder's spokesperson said the chancellor warned union leaders that strikes could damage the Social Democrats' prospects for re-election.

Labor unions traditionally support the Social Democrats at election time. But labor leaders say the party has been warned that their support is not automatically guaranteed.

In the last national election, in 1998, labor unions announced their support for Schroeder early in the campaign. But no similar promise was made at last week's May Day rally in Leipzig, where union leaders appeared on the platform with the Schroeder.

With the German leader at his side, the chairman of the German Trade Union Federation, Dieter Shulte, told the rally he supported IG Metall's wage demands. Without mentioning Schroeder by name, he said politicians should not be warning workers not to strike during an election year.