STUTTGART, Germany -- The southern division of Germany's engineering and metalworkers' union IG Metall will demand a pay rise of up to 4.5 percent in a wage round starting at the end of the year, a union source said on Wednesday.
The source in Baden-Wuerttemberg, the southern region where pay deals with employers have frequently set the benchmark for nationwide engineering sector deals, said: "We are thinking of asking for four percent but those in Stuttgart naturally want 4.5 percent."
He was referring to the trade union's regional leadership based in Stuttgart, the state capital of Baden-Wuerttemberg.
If confirmed, the demand would signal a more moderate stance than in the last pay round when IG Metall entered talks with a 6.5 percent claim. After a 10-day strike in May 2002, it obtained a rise of four percent from June 1 2002 and a further 3.1 percent from June 2003.
That deal runs out at the end of this year and IG Metall's leaders are expected to agree a new demand in November and present it to employers in December. Analysts have said they expect a demand between four and six percent.
Union sources said IG Metall, Germany's second biggest union, would seek a contract lasting at least 12 months.
They said it was feasible that the contract would contain a clause allowing more negotiations for cuts or rises if the economy should unexpectedly change.
IG Metall represents 2.6 million engineering workers at car giants like Porsche and DaimlerChrysler -- both based in Stuttgart -- as well as a host of smaller engineering companies.
IG Metall deals set the trend for the rest of the country and are closely watched by unions in other European states. The European Central Bank also monitors the pay deals because of their impact on inflation.