Volkswagen and IG Metall bring pay negotiations to successful conclusion

Volkswagen and IG Metall brought negotiations on the company collective bargaining agreement to a successful conclusion in Hanover on Monday night. From September 1, 2013, base pay for employees covered by the collective bargaining agreement will increase by 3.4 percent, followed by a further rise of 2.2 percent from July 1, 2014. Volkswagen is also making an additional contribution to company pension arrangements. For employees covered by the collective bargaining agreement, the company will make a one-time payment of €300 to the company pension scheme. For apprentices and dual-study program students, Volkswagen will pay a monthly contribution of €27.

Dr. Horst Neumann, Volkswagen Aktiengesellschaft Board of Management Member for Human Resources, commented. “Employees are receiving a good pay increase. In addition, Volkswagen is improving company pension arrangements for its workforce, particularly with reference to young employees. However, it is also clear that this collective bargaining agreement stretches us to the limit of what is possible in light of the difficult market situation in Europe and tough international competition.”

The key elements of the collective bargaining agreement are as follows:

Increase in pay: Base pay for employees covered by the collective bargaining agreement will be increased in two stages. There will be a 3.4 percent increase from September 1, 2013, and a further rise of 2.2 percent from July 1, 2014. The present pay levels will apply for July and August 2013. “Volkswagen and IG Metall have catered for the fact that competition in the automobile industry is getting tougher and tougher against the backdrop of a sharp slump in the overall automobile market in Europe,” the chief negotiator for Volkswagen, Martin Rosik, Head of Human Resources at the Volkswagen Passenger Cars brand, said and added that Volkswagen had taken its orientation for the increase in base pay from pay developments in the metal industry. “The pay rise is oriented to economic performance in this sector. That is crucial for the competitiveness of Volkswagen’s sites in Germany”, Rosik said.

One-time pension payment: For full-time employees, Volkswagen is making a one-time payment of €300 to the company pension scheme (contributory pension
scheme II). Part-time employees will receive a pro-rata based payment.

Pension provision for apprentices and dual-study program students: For apprentices and dual-study program students, Volkswagen will make a monthly payment to the company pension scheme of €27. To date, apprentices receive €13.50 (contributory pension scheme I).

Term of the collective bargaining agreement: The new company collective bargaining agreement has a term of 20 months (July 1, 2013 to February 28, 2015). According to Rosik: “This term remains closely aligned to the sector’s collective bargaining agreement and is a clear sign that our company agreement is oriented to sector-wide competition.”

Commitment to negotiate: The company and IG Metall also agreed to analyze economic conditions in May 2014. If the economic situation at that time permits, negotiations will be held to establish whether a further one-time benefit payment financed by the company is possible.

The collective bargaining agreement of Volkswagen Aktiengesellschaft covers some 102,000 employees at the plants in Wolfsburg, Brunswick, Hanover, Salzgitter, Emden and Kassel as well as Volkswagen Financial Services AG.