BERLIN, Apr 4 (Reuters) Metalworkers and engineering union IG Metall has negotiated a 3.5 percent pay increase for workers at a medium-sized firm in a deal that could serve as a model for wage talks at other mid-sized firms.
The wage rise will take effect from March 2006 for some 700 workers at precision measurement instrument maker Mahr GmbH. The deal reached on Monday evening came amid Germany-wide talks for pay rises in the sector.
The powerful union has demanded a 5 percent pay increase for the sector's 3.2 million workers and has underlined its bid with so-called warning strikes -- temporary stoppages -- at large and small firms. Hartmut Meine, head of the IG Metall in the state of North Rhine-Westphalia where Mahr is based, said the deal could become a template for medium-sized companies.
''The deal we struck at Mahr was modelled on mid-sized firms,'' said Meine in a statement. ''Mahr is not Porsche or Daimler.'' Germany's economy is based on the so-called ''Mittelstand'' -- mostly defined as companies employing 500 people or less, often run by their owners. These companies make up nearly 95 percent of firms in the engineering and metalwork sector.
Big firms like car maker DaimlerChrysler or engineering conglomerate Siemens employing over 1,000 people account for only 2 percent of Germany's firms but for more than one third of the workforce.
Keeping up pressure on employers, industrial workers across the country downed their tools again temporarily on Tuesday.
Production at a DaimlerChrysler plant in Sindelfingen came to a halt for four hours when some 15,000 workers went home, the union said. Employees at luxury carmaker Porsche joined their peers.
The employers' association Gesamtmetall has said the union's demands are unrealistic.
''We need to find a midway solution. We will try to find the threshold of pain during the negotiations,'' Gesamtmetall's President Martin Kannegiesser told state broadcaster WDR in an interview.
''The most important thing for us is that our products are not getting more expensive.'' On Monday, some 18,000 workers joined the walkouts.
IG Metall has staged warning strikes since the end of March and threatened full strikes if no deal is reached by Easter.
Employers are expected to come up with a comprehensive offer, including a number for a wage increase, on Thursday, when talks continue in the states of North Rhine-Westphalia and Baden-Wuerttemberg.
REUTERS CS HT1937