Petrobras Makes Final Wage Hike Offer to Workers

Petrobras is holding firm to a wage hike offer of 10.2 percent for workers despite pressure from unions for more following last week's warning strike, union officials said. "They made their final offer of 10.2 percent in the last day of talks on Thursday... We understand that they have the conditions to give more," said Gerson Pires, communications secretary at FUP oil workers' umbrella union.

He said unions would now wait for Petrobras to formalize the offer in a counter-proposal by the end of next week, after which unions throughout the industry will discuss it. "If it is rejected, then we will discuss the next steps in terms of pressure on the company," Pires said. Earlier he did not rule out an indefinite strike as the ultimate measure. Notably, union officials now did not reject the offer outright, as some did earlier this week when Petrobras first came up with the 10.2 percent wage hike proposal. But Pires said there was also "very little progress" on other fronts, including pensions and demands to end economic "discrimination" against new workers.

Last week, Petrobras oil workers went on a partial strike -- the first to hit Petrobras under the new center-left government of President Luiz Inacio Lula da Silva, himself a former union boss. Petrobras President Jose Eduardo Dutra is also a former union activist.

The strike did not affect output, but forced the management to begin wage talks. Unions say they are disenchanted with the state company's policies under the new administration. The unions want Petrobras to raise workers' salaries by 15.5 percent to account for inflation between September 2002 and August 2003, as well as by another 6.8 percent, which they say is the share of increased output for last year to which workers should be entitled.

Facing strike threats under the previous centrist government last year, Petrobras satisfied some of the workers' demands, including an inflation adjustment. But inflation has since sky-rocketed in Brazil.

Workers also say Petrobras profits, which jumped 86 percent in the second quarter from year-ago levels to 3.8 billion reais ($1.3 billion), allow for a bigger increase for workers, saying wages make up only 3.5 percent of Petrobras expense books.