Union warns VW could face protests if wage talks delayed

BERLIN (Reuters) - Germany's IG Metall warned Volkswagen on Monday that it could face protests from workers if it sought to delay talks about wage rises for 120,000 staff who work for the carmaker in western Germany.

Volkswagen (VW), Europe's largest carmaker, did not make a firm pay offer in a second round of talks on Monday. It said both sides first need to agree the scope of structural reforms such as changes to early retirement rules before VW is able to make a proposal on specific pay percentages.

IG Metall, which is Germany's biggest trade union, is calling for a 5 percent pay hike for workers at VW as well as for about 3.8 million engineering and metalworking staff across German industry. It is seeking a one-year wage deal.

VW has emphasised the need for a "measured settlement" as the group struggles with the costs of its diesel emissions scandal. VW suffered its biggest operating loss last year after setting aside 16.2 billion euros ($18.58 billion) in provisions to help pay for the scandal.

Employers in Germany's metal and engineering industry have offered only 2.1 percent more basic pay and a 0.3 percent one-off payment for two years. The offer last week sparked a wave of warning strikes involving thousands of workers at companies including carmakers Daimler, BMW and industrial group ThyssenKrupp.

"Whoever is trying to hide behind the industry talks must expect the anger of (VW) workers," said Hartmut Meine, the union's chief pay negotiator, adding VW was provoking its staff by ignoring the union's pay claim.

"The workers know how to defend themselves," Meine said after the talks in the German city of Hanover.

VW said it was facing massive upfront investments in electric cars and new digital features to help preserve jobs in Germany as it is faced with growing competition from technology firms such as Google.

"The wage round is taking place under still difficult circumstances," said VW brand human resources chief Martin Rosik.

Both sides will resume negotiations on May 19. If no agreement is reached by May 31 when current wage contracts at VW expire, IG Metall could call for short-term strikes.

($1 = 0.8718 euros)

(Reporting by Andreas Cremer; Editing by Keith Weir)