Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

A worker wears a protective mask at the Volkswagen assembly line in Wolfsburg, Germany, on April 27, 2020.

POOL New/Reuters

Europe’s largest carmaker Volkswagen has agreed a wage deal with Germany’s most powerful union for 120,000 employees, representing 18% of its workforce, it said on Tuesday.

The deal with IG Metall, struck after 14 hours of negotiations in what was the fifth round of talks, will see salaries rise by 2.3% from January 2022.

It also includes a 1,000 euro ($1,190) one-off “corona support payment” in June 2021, the carmaker said.

Story continues below advertisement

“We have reached a wage agreement that is both proportionate and reasonable and that reflects the particularly challenging environment since the start of the pandemic,” Arne Meiswinkel, Volkswagen’s chief collective bargaining negotiator, said.

Volkswagen, the world’s second-largest carmaker, will also boost the company’s pension scheme by 150 euros per month from September 2021 onwards, it said.

IG Metall had originally asked for a wage increase of 4% and last month dismissed Volkswagen’s most recent offer of a 250 euros payment for the first half of 2021 and a wage increase of 1.2% for 2022.

Volkswagen has seen its shares rise by more than half since the start of the year, shrugging off the impact from the coronavirus pandemic and a chip shortage that has hit the automotive sector.

This gives the carmaker, whose shares were flat on Tuesday, a market value of about 136 billion euros, making it Germany’s most valuable listed company.

“Workers have earned their fair share of the company’s success for, after all, it’s they who have helped Volkswagen to navigate through the crisis profitably despite adverse conditions related to the pandemic,” Thorsten Groeger, who led negotiations for IG Metall, said.

Employers have warned that hundreds of thousands of jobs could be lost in Germany if Europe’s largest economy cannot improve its competitiveness and have said there was limited room for wage increases.

Story continues below advertisement

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies