Volkswagen manages to wage deal with IG Metall union

Photo: EPA A Volkswagen ID.4 electric car sits inside one of the car towers at the Volkswagen Autostadt Wolfsburg in Germany

Europe's largest carmaker Volkswagen has agreed a wage deal with Germany's most powerful union for 120,000 employees, representing 18% of its workforce. The deal with IG Metall, struck after 14 hours of negotiations in the fifth round of talks, will see salaries rise by 2.3% from January 2022.

It also includes a €1,000 ($1,190) one-off "corona support payment" in June 2021, the carmaker said.

"We have reached a wage agreement that is both proportionate and reasonable and that reflects the particularly challenging environment since the start of the pandemic," Arne Meiswinkel, Volkswagen's chief collective bargaining negotiator, said.

Volkswagen, the world's second-largest carmaker, will also boost the company's pension scheme by €150 per month from September 2021 onwards, it said.

IG Metall had originally asked for a wage increase of 4% and last month dismissed Volkswagen's most recent offer of a €250 payment for the first half of 2021 and a wage increase of 1.2% for 2022.

"Workers have earned their fair share of the company's success for, after all, it's they who have helped Volkswagen to navigate through the crisis profitably despite adverse conditions related to the pandemic," Thorsten Groeger, who led negotiations for IG Metall, however, concluded.

Employers have warned that hundreds of thousands of jobs could be lost in Germany if Europe's largest economy cannot improve its competitiveness and have said there was limited room for wage increases.

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