German chemical union delays wage hikes as war worsens business outlook (updated)

Bayer AG

25/03/2026 13:04

Adds details of deal, context

DUESSELDORF, March 25 (Reuters) - Germany's chemical industry union said on Wednesday it had agreed with employers to delay wage hikes until January next year, citing a weak business environment further strained by the war in the Middle East.

Under a collective bargaining deal, the IGBCE union said wages would increase by 2.1% in early 2027 and again by 2.4% a year later.

“We pushed ourselves to the limit to reach this crisis settlement,” said IGBCE Chairman Michael Vassiliadis.

The union said a difficult economic environment over recent years had taken its toll on companies and its workers, and surging energy prices due to the conflict in the Middle East compounded the situation.

The industry has said it was suffering from U.S. tariffs, competition from China and fallout from the Russia-Ukraine war.

COMPANIES TO PAY 300 EUROS PER EMPLOYEE

Under the deal, companies will pay 300 euros ($348) per employee this year and, in 2027, into a fund that will be used for a range of job security measures.

Large employers in the industry include BASF BASFn.DE, Bayer BAYGn.DE, Henkel HNKG.DE and Beiersdorf BEIG.DE, as well as major foreign producers.

Collective bargaining in another major sector has been more confrontational, with German services workers' union Verdi staging several strikes this year to push for better pay from municipal and state employers.

The European Central Bank has said it was on the lookout for early warning signs, including from wage developments, that the conflict is stoking inflation.

($1 = 0.8621 euros)

 (Reporting by Matthias Inverardi;
Writing by Ludwig Burger;
Editing by Matthias Williams and Bernadette Baum)

 ((ludwig.burger@thomsonreuters.com))