Tarifrunden in the German metal and electrical industry have had one thing in common for several years: They are taking place in a political and economic environment that has become rougher, less secure and therefore extremely confusing for the social partners. And in times as volatile as these, with a wealth of massive challenges, the collective bargaining agreements reached by employers’ associations and trade unions are under particular scrutiny among their members.
That will also be the case this year. The pressure on the companies with their around 3.8 million employees in view of the major risks is immense: the ongoing uncertainty caused by the pandemic that has not yet been overcome, the massive global supply bottlenecks, the exorbitantly rising energy costs and the dramatic price increases for primary products , materials and raw materials, the visible skid marks of the recession of the past four years and, most recently, the unforeseeable economic effects of the Russian war of aggression in Ukraine – all of this weighs heavily on our companies.
And on top of that there are the challenges that our industry – already in the midst of a far-reaching transformation process – has to master by implementing the ambitious climate goals of politics. These are difficult times for our companies, which are struggling in a special way at the same time for their international competitiveness and for investments in Germany.
Will the collective agreement become too expensive?
This is one of the reasons why the tension in our companies before the 2022 collective bargaining round is high. Of course, companies still appreciate the long phases of industrial peace during the term of a collective agreement, which give them calculation and planning security. They know that the area tariff offers them an important piece of reliability, especially in such turbulent times. At the same time, they worry about their future viability in collective bargaining rounds if they fear that balancing interests across the board will be too expensive.
Against this background, metal employers’ associations and IG Metall are faced with a balancing act this fall: because the current economic situation and the business prospects have not really changed even in the fourth year of the recession, solutions must be found that do justice to the rough environment just as much as they do have to take into account the massive structural pressure to change in companies.
The biggest concern for us in every respect is the dramatic price development. It is possible that the collective bargaining policy in our branch of industry is therefore even facing a historical test: Our companies are struggling across the board with double or even triple-digit inflation rates for energy, raw materials and procurement prices. Anyone who thinks that our companies can simply pass on price jumps of this magnitude to customers and consumers is seriously mistaken. At the same time, however, I am aware that rising consumer prices are a major concern for our employees. It is good that IG Metall recognizes that collective bargaining cannot compensate for exogenous price shocks such as we are currently experiencing. And that’s why I expect the federal government to respond to inflation with significant relief. I therefore expressly welcome the Chancellor’s proposal for concerted action.
Regardless of this, the union has recently repeatedly announced high wage demands. I can only urgently warn against fueling inflation even further through excessive wage settlements in the industry that is most important for the German economy. In view of the boom in this branch of industry, the steel agreement certainly cannot be a blueprint for the German metal and electrical industry. And earnings reports from individual companies should not hide the fact that our industry as a whole is still well below the pre-crisis level.
We need a collective agreement that does justice to both the many companies that are in a deep crisis and those companies that are still coping well with the difficult times overall, but are facing serious structural upheavals. It is a complex situation that calls for a differentiating approach to collective bargaining. What is needed is a set of collective bargaining tools that takes into account the extremely heterogeneous situation in the companies.
Collective bargaining rounds are always the actual stress test for the viability of the social partnership in our country. Metal employers and IG Metall have always been able to do justice to this – also because the negotiators listened to each other carefully and understood the perspective of the other side. I think that the balancing of interests was particularly successful in the last two rounds of collective bargaining, when we were able to keep many jobs and secure real incomes in the most difficult environment. This was a tremendous feat for our company, which could also be mastered through the responsible cooperation of the collective bargaining partners. Precisely because the political and economic situation has deteriorated even further, I really hope that we will be able to build on this in the coming months.
Arndt G. Kirchhoff is President of the Employers’ Association of the Metal and Electrical Industry in North Rhine-Westphalia (Metall NRW) and conducts collective bargaining with IG Metall in the largest federal state. He is also vice-president of the umbrella organization Gesamtmetall.
