Lufthansa staff urge end to US air pact

PAY TALKS at Lufthansa, Germany's stricken national carrier, ended yesterday without agreement. They began with a dramatic open letter from the workers to Chancellor Helmut Kohl asking him to break off the air traffic agreement with the United States.

The company's works council said this was the only way to save the state-owned firm, expected to run up losses this year of more than DM1bn ( pounds 370m), from collapse. The inbuilt advantages for US carriers across the Atlantic made Lufthansa's 'survival in the long term impossible with such an agreement', the council wrote.

Last weekend, in a remarkable example of how the worsening economic climate in Germany has begun to exert pressure on industrial negotiations, the white-collar union at Lufthansa, DAG, offered to accept lower wages for longer working hours. DAG said such measures were unavoidable if the company's fortunes were to be restored.

But employers' calls for a return to the 40-hour week were sharply rejected yesterday by the main public sector union, OTV, which said this would lead to the loss of 3,000 jobs at Lufthansa. It is expected that management will soon reveal details of a restructuring that will involve the cutting of 10,000 of the company's 50,000 jobs.

The DAG offer to lengthen working hours has sparked calls by the main employer federations for an end to the strategy begun in the 1970s of seeking ever more money for less work. Working time and the introduction of greater flexibility in work practices are set to become the dominant theme of German industrial relations.

Professor Herbert Hax, chairman of the group of independent economic advisers known as the 'five wise men', yesterday voiced his fear that, however desirable a return to the 40-hour week might be, such an outcome is unlikely.

This was because the 'legally binding agreements on shorter hours are no longer reversible', Prof Hax said.

He painted a gloomy picture of the German economy, saying that the forecast of growth of 2 per cent this year was unattainable.

The combination of excessive wage claims, a restrictive monetary policy in Germany itself, and continuing international weakness, meant that Germany is 'no longer far from a recession', Prof Hax said.