(Releads, changes dateline, adds employer offer)
By Alexander Huebner
BOEBLINGEN, Germany, Jan 23 (Reuters) - Pay talks between German engineering firms and the country's largest industrial union, IG Metall, were adjourned on Friday after employers offered the union less than half the pay rise it was demanding.
Otmar Zwiebelhofer, the employers' chief negotiator in Baden-Wuerttemberg, said he had offered the union two 1.2 percent pay rises over three years. IG Metall wants four percent over the next 12 months and has threatened warning strikes if it doesn't get its way.
Zwiebelhofer said the talks had stalled. "We will have to wait for feelings to cool down at IG Metall," he told a news conference in the south-western town of Boeblingen.
IG Metall in Baden-Wuerttemberg, the state which traditionally leads pay talks for the rest of the country, said earlier on Friday it would hold warning strikes in February if a deal was not reached by January 28.
"If nothing has happened by the end of the truce period, we will resort to warning strikes," said an IG-Metall spokesman.
An obligation binds the union and employers to avoid industrial action until January 28. Warning strikes are a key element in German wage talks and are typically brief.
IG Metall represents 3.5 million engineering workers at car giants like Porsche and DaimlerChrysler as well as a host of smaller engineering companies.
Zwiebelhofer said employers wanted a deal which allowed employers to adapt working hours within a 35 to 40-hour corridor. Firms would decide with workers at company level whether there would be any compensation for longer hours.
He said employers had offered the union a 1.2 percent pay rise for the 15 months to March 2005 and then another 1.2 percent increase to March 2006.
Separately on Friday, Germany's Berliner Zeitung newspaper reported IG Metall head Juergen Peters had said the union would drop its sector-wide wage agreement in eastern Germany.
Last summer an IG Metall strike failed to reduce members' 38-hour working week in the east of the country to the 35-hour week in place in western Germany.
While analysts say the union's power has waned as a result of falling membership and the failed strike, IG Metall says it will not back down over employers' demands for more flexible working hours so they can adapt to economic changes.
In the last pay round IG Metall entered talks with a 6.5 percent claim. After a 10-day strike in May 2002, it got a rise of four percent from June 2002 and a further 3.1 percent from June 2003.