Employers offer staggered pay rise to workers in German industry, say sources

NUREMBERG, Germany (Reuters) -Employers have offered a staggered pay rise of 1.7% and 1.9% over a period of 27 months to workers in Germany's auto, electrical and metal industries, sources said on Tuesday, falling short of the demand made by the union.

The offer foresees the first increase on July 1, 2025 and the second a year thereafter, two sources said.

Northern Germany is expected to be the first negotiating district to officially announce its position later Tuesday, with other districts expected to fall in line.

Germany's largest industrial union, IG Metall, has demanded a pay rise of 7% for the almost four million workers and has threatened to strike alongside the talks.

Employers represented in the talks include Siemens, Mercedes-Benz and BMW.

Not included in the talks is Volkswagen, which has its own in-house collective bargaining negotiations, the second round of which is scheduled to begin on Oct. 30.

The first round ended without agreement and the IG Metall industrial union has threatened strike action.

Already beset with high costs and fierce competition from abroad, Volkswagen is considering closures of plants in Germany, illustrating the challenges it faces more broadly as Europe's largest economy battles against the threat of de-industrialisation.

(Reporting by Ilona Wissenbach in Frankfurt and Alexander Huebner in Nuremberg, Writing by Rachel More, Editing by Madeline Chambers)