Volkswagen strikes wage deal, salaries will rise by 2.3%

The agreement has been reached after 14 hours of negotiations

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Volkswagen has struck a wage deal with IG Metall, the German union that represents 1,20,000 employees, that is, about 18 per cent of its workforce. Post 14 hours of negotiations and five rounds of talks, the employees can now look forward to a 2.3 per cent increment w.e.f January 2022.

The car manufacturing company will also boost the Company’s pension scheme by 150 euros every month, starting September this year.

Earlier, the Union had demanded a four per cent hike. Volkswagen, had, on the other hand, offered to pay 250 euros for the first half of 2021, along with a wage hike of 1.2 per cent for 2022. The same had not been accepted by the Union.

Despite the pandemic-induced slump and a chip shortage that badly impacted the automotive sector, Volkswagen’s shares have risen compared to the beginning of the year. Its market value stands at about 136 billion euros, making it amongst the most valuable listed firms in Germany.

Last year, amidst the pandemic, Volkswagen’s Mexico unit had agreed to an increase in worker pay and benefits of 5.46 per cent, after negotiations with the local union for the German automaker. The final deal was for a salary hike of 3.62 per cent and a hike in benefits of 1.84 per cent.

The 3.62 per cent increase was in line with the annual rate of inflation recorded in Mexico in July 2020.

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