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Business

Chemicals Industry, Unions Reach Agreement

Good news for the government as the first of Germany's mighty unions reaches a compromise with industry leaders. The result puts pressure on the country's other major unions to follow suit.

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Strike-ready

One down, one to go.

The union representing Germany’s chemical workers agreed to a collective bargaining agreement with the country’s industry leaders. The close to 500,000 workers in the cornerstone industry will see a 3.3 percent wage increase this coming year, three percent less than what Germany’s metalworkers union is asking.

The news brought only partial relief to Germany’s ruling Social Democratic-Green coalition government. IG Metall, which represents some 3.6 million workers in the metal and electronics industry, announced it would begin full strikes on May 6 after negotiations for a 6.5 percent wage increase broke down on Friday.

IG Metall Chair Klaus Zwickel called the ICBE agreement the "lowest possible line for all collective bargaining negotiations in the coming week."

Industry squeezed

But many wonder if he will get much more. Faced with a slumping economy only expected to grow in the second half of the year - if at all - industry leaders say more than a 3 percent wage increase is unthinkable.

The chairs of some of Germany's big industry associations were already coming out critical of the agreement reached in the chemical industry.

"The agreement is too expensive," said Michael Rogowski, who heads the Federal Association of German Industry. "There won't be any new jobs."

Economic bedrock

Bayer Aspirin

Azubi Carsten Metz ueberprueft einen Sensor am Verpackungsautomaten fuer Aspirin-Brausetabletten in der Bayer Bitterfeld GmbH am 11. Jan. 1996. Die Bayer AG wird ab Donnerstag, 24. Januar 2002 auch an der new Yorker Boerse gehandelt. (AP Photo/Eckehard Schulz)

But stability is most likely what the two sides were looking for. Chemicals are one of the cornerstones of the German economy, highly valued as an export and among Europe's most important employers. One in every five chemicals workers in Europe works for a German company, according to the German Chemical Industry Association.

Preserving an economic bedrock in turbulent times seemed to be in the interest of both sides. Add to that the chemical union's traditionally more amicable approach to collective bargaining and Thursday's announcement makes logical sense.

The focus now shifts to IG Metall, which is facing a decidely tougher battle for its wage increase requests. After the Thursday announcement, Germany's editorial pages and politicians have called for Metall to follow suit.

But IG Metall isn't listening. After last ditch efforts Friday, talks have officiall broken down. Workers will begin striking May 6.

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