Volkswagen and German union reach salary agreement

According to a source familiar with the negotiations, the metalworkers’ union IG Metall and Volkswagen reached a wage agreement for the automaker’s western German factories that closely followed a previous accord for the nation’s larger metal engineering sector.

According to the two-year agreement, employees will receive a lump sum payment of 3,000 euros ($3,093) after taxes as well as a combined 8.5% wage increase in two steps.

In a statement released on Wednesday, the union announced that it had reached a wage agreement with Volkswagen and that a news conference would be held in the northern city of Hannover at 8:00 GMT.

The largest union in Germany, IG Metall, demanded in July that 125,000 employees at six German Volkswagen plants as well as at subsidiaries like Financial Services receive an increase in pay of 8%.

In a different agreement this month, IG Metall agreed to a pay increase that was below inflation, setting the standard for 3.9 million workers in the German metal and electrical sectors. This agreement indicated that wage pressures in the larger euro zone were manageable.

Workers’ pay will increase by 5.2% starting in June 2023 and 3.3% starting in May 2024, according to the agreement reached at the time with employers. Additionally, a 3,000 euro lump sum will be paid tax-free in two instalments in March 2023 and 2024.

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