German IG Metall branch seeks 7-8 pct wage rise

BERLIN, Sept 4 (Reuters) – A regional branch of German industrial union IG Metall said on Thursday it was seeking a wage increase of 7-8 percent for engineering workers in a move likely to serve as the basis for a nationwide pay demand.

"The income situation of the sector is extremely good," said Joerg Hofmann, head of the union's regional chapter in the southwestern state of Baden-Wuerttemberg.

The pay demand for the 800,000 engineering workers in the region will be debated by the union's national committee on Monday and it will make a final recommendation for the country's roughly 3.6 million engineering workers on Sept. 23.

Talks will then get under way with employers, and union officials have already said they are ready to stage temporary stoppages to push their demand for a better deal than in 2007.

In last year's wage round, the union settled for a two-stage wage increase of 4.1 percent and 1.7 percent in a contract running for 19 months that expires at the end of October.

If Baden-Wuerttemberg serves as the basis for the rest of the country, as expected, it would be the highest wage demand for the sector since 9.5 percent in 1992, according to data from the union-funded Hans Boeckler foundation.

On Wednesday, the head of IG Metall in the state of North Rhine-Westphalia said the union was considering staging stoppages in November.

However, Martin Kannegiesser, head of Gesamtmetall, the engineering sector employers' association, has said workers must temper their expectations due to a worsening outlook.

Inflation in the euro zone touched a record high of 4.0 percent this summer, and European Central Bank (ECB) policymakers concerned about the outlook for prices have urged unions to make moderate pay demands.

The ECB raised its main lending rate to 4.25 percent in July, even as other central banks were cutting rates to counter an economic slowdown. It held rates steady on Thursday.