VW workers agree to work longer without pay rise

29th September 2006, Comments 0 comments

29 September 2006, LANGENHAGEN, GERMANY - Europe's biggest carmaker Volkswagen AG said Friday that it had hammered out a new far-reaching agreement with unions which includes an increase in the working week without a corresponding pay rise. The long-running negotiations form part of a major restructuring by the German-based auto goup of its flagship VW brand aimed at trimming costs in the face of intense competition in the global car business. Volkswagen shares jumped by more than two per cent to 69.30 eur

29 September 2006

LANGENHAGEN, GERMANY - Europe's biggest carmaker Volkswagen AG said Friday that it had hammered out a new far-reaching agreement with unions which includes an increase in the working week without a corresponding pay rise.

The long-running negotiations form part of a major restructuring by the German-based auto goup of its flagship VW brand aimed at trimming costs in the face of intense competition in the global car business.

Volkswagen shares jumped by more than two per cent to 69.30 euros (88 dollars) following the announcement of the deal agreement.

"With these points...we have taken a big step forward in the restructuring of Volkswagen," Horst Neumann, the carmaker's personnel director, said.

Under the deal, workers employed at VW's six key western German plants are to work a flexible week of between 25 and 33 hours. This represents an increase of more than four hours a week.

In return, VW workers are to receive an additional one-off 6,279 euros retirement payment.

The engineering industry union IG Metall also secured a promise from VW to produce its new Golf model at the company's key Wolfsburg plant. The deal also includes production deals for the group's other west German plants.

Volkswagen wants to wind back its western German workforce by about 20 per cent or 20,000 jobs as part of its attempts to address costs, and has introduced a series of incentives to try to encourage workers to leave the group.

The company agreed not to proceed with forced layoffs or cutbacks until 2011 as part of another agreement reached in 2004.

DPA

Subject: German news

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