Wage negotiations in the German metal-working and electronics industries have concluded on a positive note.

IG Metall, the main metal-working trade union, which represents the majority of automotive industry workers, said that, from 1February 2009, workers would be entitled to a pay rise of 2.1%. This would increase to 4.2% from May 2009.

The deal also includes one-off bonus payments of EUR510 in November and December 2008, and January 2009, and further bonus payments equivalent to 0.4% of monthly salary for the months of May to December 2009.

The agreement would last for 18 months until April 2010, Automboilwoche said. It added that employers had said there would be additional payments, equivalent to a 1.6% increase, for the period January to April 2010, but this would be made only in the form of pension contributions.

The agreement means that the first all-out strike in the German automotive industry for six years has been avoided.

Ahead of the negotiations earlier this week, unions and employers had been optimistic that a compromise could be reached. But this morning, after more than 20 hours of talks, reports were emerging that talks had become stuck on a couple of points. The IG Metall trade union told a German press agency that things were becoming increasingly difficult.

Last week saw the staging of some one to two-hour warning strikes across the country, ahead of what was the fifth round of negotiations this week.

Unions had inittially demanded an 8% pay rise but employers had originally offered just 2.1% plus bonus payments.