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VW Sidesteps Strike With Big Pay Hike

Biggest pay increase in 20 years.

by on Jun.04, 2012

Workers at VW's "Glass Factory" in Dresden.

Volkswagen AG, Europe’s largest automaker, has agreed to give its German workers a pay increase of 4.3%, following the pattern set last month at Daimler, Porsche and BMW.

Under the one year contract, which expires next June, the pay increase took effect June 1 and covers more than 102,000 employees at VW manufacturing and financial services units.

German employers originally asked for a two-year contract but apparently agreed to the one agree contracts on the assumption negotiators from IG Metall will be willing to reduce demands if the European economy continues to soften over the next 12 months.

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The union, however, also won important concessions from VW and other employers in Western Germany for boosting the wages and benefits of trainees, students and temporary workers. Temporary workers also got a 4.3% pay increase as part of the deal.

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