Deal reached in Volkswagen labour dispute

3rd November 2004, Comments 0 comments

3 November 2004 , HANOVER - Management at Volkswagen and union leaders Wednesday agreed to a 28-month pay freeze as part of plans by the giant German-based carmaker to drastically cut costs.

3 November 2004

HANOVER - Management at Volkswagen and union leaders Wednesday agreed to a 28-month pay freeze as part of plans by the giant German-based carmaker to drastically cut costs.

In agreeing to the deal Volkswagen, which is also Europe's biggest carmaker has given a guarantee that there will be no layoffs before 2011, the chief union negotiator said Wednesday.

The VW deal comes in the wake of a string of new agreements in Germany's key car industry which have involved employers forcing unions to accept moves to wind back work benefits in the face of intense global competition.

VW had threatened mass job custs if it failed to reach agreement with workers on its plans to reduce labour costs by EUR two billion euro and to introduce a wage freeze. 

Wednesday's compromise follows marathon talks between the company and the IG Metall union, which is Germany's biggest industrial union.  

The union had demanded annual increases of 2.2 percent and 2.7 percent in a 26-month deal, along with job guarantees for 103,000 workers employed at six Volkswagen works in western Germany.

Tens of thousands of Volkswagen have been taking part in warning strikes to press their claims for job guarantees plus the two percent wage rise. 

"We were able to reach a fair balance between the aim of securing jobs on one side and the company's interest in reducing costs," union negotiator Hartmut Meine said.

Under the deal, pay levels are to be frozen until 31 January 2007. But workers will receive a one-off payment of EUR 1,000 next year.     

[Copyright Expatica News 2004]

Subject: German news

0 Comments To This Article