Automaker Volkswagen has agreed to a wage deal with one of Germany’s largest unions IG Metall for 120,000 employees that make up approximately 18% of its workforce.
Negotiations between Volkswagen and IG Metall went for around 14 hours and resulted in the signing of a deal that will see employee wages increase by 2.3% starting in January 2022. The deal also includes a one-time “Corona Support Payment” of 1,000 Euros ($1,190) in June 2021.
Volkswagen’s chief collective negotiating officer Arne Meiswinkle made a statement that Volkswagen had reached an agreement with the union “that is both proportionate and reasonable and reflects the particularly challenging environment since the start of the pandemic”.
Volkswagen will also be increasing its pension scheme for employees, raising its contribution by 150 Euros per month starting in September 2021.
IG Metall started negotiations by asking for a 4% increase in wages and dismissed a proposal by Volkswagen last month where they proposed a 1.2% pay increase and a 250 Euro one-time payment.
Shares of Volkswagen’s stock have risen by more than 50% since the start of 2021 despite pandemic conditions and microprocessor shortages that have crippled parts of the auto industry. The German automaker is currently valued at around $136 billion, making it the nations most valuable publicly traded company.
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