Volkswagen shares fall as car maker agrees pay deal
Volkswagen shares are trading in the red Wednesday, in the wake of news the German car maker has agreed to increase staff wages by 4.3%. The agreement follows four separate rounds of negotiations and represents another major victory for German union IG Metall.
By 1315 BST, Volkswagen shares were down 1.54% at €162.32. Volkswagen shares have been moving lower during the past three weeks, in line with volatile stock markets.
Volkswagen pay deal
Germany’s IG Metall workers union has been in negotiations with the car maker for some time. The final deal will see some 120,000 Volkswagen workers receive a 4.3% pay rise from May 2018.
IG Metall orignally sought a 6% pay rise.
They will also receive an annual payment worth 27.5% of one month’s salary each year, from 2019. However, staff will have the option take an additional six days holiday instead of receiving the extra pay out.
The company pension scheme will also be “significantly” improved and there will be some changes to project working times.
“Our pay agreement is effectively at the same level as that reached in the metal industry,” said Dr. Karlheinz Blessing, Member of the Board of Management of Volkswagen Aktiengesellschaft responsible for Human Resources.
“This was an important objective for us in order to safeguard the competitiveness of Volkswagen. At the same time, we have made Volkswagen significantly more attractive as an employer,” Blessing added.
Ground breaking pay deal
The agreement was described as ‘ground-breaking’ by IG Metall.
“This conclusion is ground-breaking: a significant increase in pay and, moreover, a tripling of the contribution to pensions,” said IG Metall District manager and negotiator Thorsten Gröger.
The pensions improvements include an increase to Volkswagen monthly contribution from 27 euros to 90 euros in 2019.That will rise again to 98 euros in 2020.
The agreement was achieved after IG Metall threatened the car maker with strike action by its members.