HAMBURG, Germany — Metalworking union IG Metall said it has reached a wage agreement with Volkswagen Group for the automaker’s West German plants which will raise wages by 8.5% for around 125,000 workers.
The deal announced on Wednesday would have been seen as exceptionally generous until recently, but is now below inflation, which was 11.6% last month in Germany, Europe’s biggest economy.
Under the two-year deal, workers will receive a pay rise of 5.2% from June 2023 and another 3.3% from May 2024, as well as a one-time lump sum payment. worth 3,000 euros ($3,093) after tax to help offset soaring inflation.
“In combination with policy relief measures such as lower electricity and gas prices as well as other one-off state payments, the result is a comprehensive package that limits the impact of inflation “, IG Metall negotiator Thorsten Groeger said in a statement. .
IG Metall, which is the largest trade union in Germany, originally asked for an 8% pay rise more than 12 months for workers at six German VW factories as well as subsidiaries including Financial Services.
The deal at VW is similar to an earlier deal for the wider metalworking industry in Europe’s biggest economy.
IG Metall this month agreed to a below-inflation wage hike that set the benchmark for 3.9 million workers in the metal and electrical sectors across Germany, as part of a an agreement that indicated manageable wage pressures in the wider euro area.