German unions rejected VW pay offer

Article by Christian Andrei, on February 25, 2011

German unions turned down Volkswagen AG’s offer, which would raise the salaries of the workers by 2.9 percent over the next two years and give them a one-time payment of EUR300 before the end of June 2011.

Under the offer, not only would the 100,000 western German workers at VW receive about half of the sum they want, their pay would effectively be frozen for the second year of the contract.

Hartmut Meine, IG Metall’s chief negotiator, recently said that the difference between demand and offer is much too big and the length of the deal has to be shorter and the proposed pay hike higher.

He added that the VW should consider that success can only be sustainably guaranteed with the team. Economists are monitoring developments in German wages as a signal both for a potential improvement in household spending and for second-round inflationary effects.

The talks between VW and its workers is an indicator for 2012's collective wage bargaining in the engineering sector. In talks with VW, IG Metall is demanding a 6 percent pay increase for the next 12 months.

Jochen Schumm, VW’s chief negotiator, said the offer's length was aligned on the current 23-month wage deal in the engineering industry, where workers received a pay freeze in the first year and are now set to get 2.7 percent more starting in April 2011, at the latest. [via autonews - sub. required]

Topics: vw, germany

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