A deal has been forged between German engineering sector union IG Metall and Volkswagen AG for job guarantees to be extended by three years until 2014, according to a union spokesman. The deal, which took months of negotiation, was entered amid weak car markets, stunted growth, and increasing unemployment in western Germany.
Last November, this proposed deal had raised the hopes of 90,000 workers in its high-wage western German plants as its personnel director had talked about the possibility of extending job guarantees until 2014.
In the past, VW, BMW AG, Daimler AG and other European carmakers have granted staff job guarantees for several years.
These were typically done in exchange for concessions such as a pay freeze, longer hours, or more flexible working agreements.
VW's in-house deals are unusual in a country where unions tend to negotiate in behalf of an entire industrial sector. DekaBank economist Andreas Scheuerle said that this sets the tone for what is expected to happen in the engineering and metalworking industry.
He said that it appears like wage negotiations in [the German state of] North Rhine-Westphalia are in the final stages and also focused on job guarantees.
VW CEO Martin Winterkorn has a goal to raise productivity by 10% a year. The union supports this goal on the condition that it doesn't result to job cuts.