German engineering workers begin warning strikes over 5% pay demand

what happened

Workers in Germany's engineering industry began temporary warning strikes on Sunday. The dispute involves 3.7 million employees seeking a 5% pay increase, while employers face a deepening slump in the automotive sector.

About 300 staff at the Rasselstein unit of Thyssenkrupp and workers from nearby firms joined the first walkout, which started at midnight, IG Metall said. The union rejected the employers' second-round offer, calling it a "minus offer" that would amount to a real pay cut. Employers proposed a one-off payment of 1% of annual gross pay in summer 2027 and a further 1.3% rise from July 2028.

Jörg Köhlinger, head of IG Metall's central district, said the Rasselstein strike was "merely the start" of a larger wave of warning strikes. The union said more actions would follow in coming days across the bargaining region, covering Hesse, Rhineland-Palatinate, Saarland and Thuringia.

why it matters

Strikes in a key German industry raise the risk of production disruptions and add uncertainty to an economy already struggling in autos. For markets, this signals possible cost pressure on industrial companies and a wider strain in the labour market.

market impact

German industry: production disruption and higher cost risk weigh on engineering and auto-supplier shares

• ▼DAX pressure down — risk of production disruption and higher costs in industry

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