German metals industry affected by strikes, expects 'significant revenue loss’

The German metals sector is being hit with a number of day-long strikes this week while negotiations over pay between employers and trade union IG Metall continue, Metal Bulletin heard on Wednesday January 31.

German metals companies could incur a significant loss of revenue, due to production and delivery shortfalls as a result of the strikes, along with additional costs for catching up on outages and possible penalties, according to industry body Südwestmetall.

Base metals production companies, steel tooling firms and automotive manufacturers are among the firms affected this week, with 24-hour strikes scheduled to take place on Wednesday, Thursday and Friday.

Steel parts producer ThyssenKrupp Rothe Erde, where strikes are taking place in both Dortmund and Hamm-Lippstadt, north-western Germany, could stand to take a large financial loss, according to IG Metall.

“The company has 1,320 employees and 90% are members of IG Metall,” Christian Julius, works council chairman of ThyssenKrupp Rothe Erde said on Tuesday.

"If Rothe Erde stands still for 24 hours, the company will lose €1 million [$1.24 million] in sales," he said.

A ThyssenKrupp spokesman told Metal Bulletin that the company was “well prepared” for the industrial action, and that the strikes only involve a small portion of the group’s overall German workforce.

The industrial action is not directly affecting ArcelorMittal’s steel production sites or ThyssenKrupp’s primary steelmaking operations because these workers have separate pay negotiation contracts, Metal Bulletin heard.

A similar wage strike in the metal and electrical industry during the spring of 2002 – which lasted for a ten-day period – involved 200,000 workers and if repeated this year, would cost the sector €2.5 billion, German industry body Nordmetal said.

The impact on metal markets has so far been limited, but with negotiations between IG Metall and employers still ongoing, it is unclear how long the industrial action may continue for.

“Strikes in Germany are usually short but nevertheless expensive for all sides,” one German source said.

Sites on strike

According to an IG Metall communication seen by Metal Bulletin, 30 metal and electrical production sites are dealing with strikes on Wednesday in the North Rhine-Westphalia region in northern Germany.

Five steel tube business sites belonging to the Salzgitter Mannesmann group are facing strikes in Bielefeld, Hamm-Lipstadt, Remscheid-Solingen, Siegen and Unna. This included three precision tube sites and two stainless tube sites.

Strikes began at Berzelius Stolberg, a lead smelter owned by major producer Ecobat, on Tuesday January 30 at 10pm in Stolberg.

Since 6am on Wednesday, industrial action has been taking place at major commodity-grade zinc consumer and producer of oxides and titanium zinc Grillo Werke. IG Metall called on 430 workers at the plant to down for the day, according to the German newspaper WAZ.

Workers at major copper consumer KME went on strike on Tuesday evening in Märkischer Kreis, while KSM Castings, a diecaster and consumer of aluminium and zinc, has had strikes taking place since 6am on Wednesday morning in Wuppertal.

Manufacturing conglomerate Georg Fischer, a secondary aluminium consumer, has had strikes in Velbert from Wednesday morning.

"I haven't heard that it will have an effect on the aluminium market," one European aluminium trader said.

Car components maker ZF Friedrichshafen TRW Automotive in Gelsenkirchen, carmaker Porsche in Zuffenhausen, western Germany, and fellow automotive company Mercedez Benz in Zuffenhausen, also in western Germany had strikes on Wednesday January 31.

Way forward

IG Metall is demanding a 6% pay raise for members in the metals and electrical industry for the next 12 months, along with a reduction in working hours to a working week of 28 hours.

It also wants subsidies for employees who reduce their working hours and look after children, care for family members or work shifts.

Industry group Gesamtmetall said that the demands are unfair and unrealistic, even if they come at a time of economic strength in German manufacturing.

Europe's purchasing manager's index (PMI) for manufacturing in the Eurozone has hit record highs in recent months, with the German sector consistently in the top-three performing nations in the Eurozone.

But Südwestmetall called the strikes “unlawful” and announced it has filed a lawsuit against the industrial action at the Labour Court of Stuttgart on Wednesday.

Strikes continue tomorrow at production sites for companies including automotive parts producer Gestamp, steel parts producer Kennametal Widia and carmaker Ford, according to a document seen by Metal Bulletin.

Archie Hunter and Justin Yang, both in London, contributed to this report.

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