Volkswagen is to increase base pay for 120,000 employees by a total of 4.8% by August 2017.
The collective agreement, which follows negotiations with trade union IG Metall, will be implemented in two stages; a 2.8% pay rise will occur on 1 September 2016 and a 2% pay increase will come into effect on 1 August 2017.
In addition to this, the organisation will provide a pension building block of €200 for each employee, as well as introduce differentiated provisions for those who plan on applying for partial early retirement. This will be available for employees born between 1961 and 1967, and will come into effect from 1 January 2017. Terms between two and eight years will be available depending on individual circumstance.
The collective agreement will apply to almost 120,000 employees at the Wolfsburg, Brunswick, Hanover, Salzgitter, Emden and Kassel plants, as well as staff at Volkswagen Financial Services.
Dr Karlheinz Blessing, member of the board of management of Volkswagen Aktiengesellschaft, said: "The pay increase is basically equivalent to the results of collective bargaining in the metal industry. In addition, Volkswagen and the IG Metall trade union have agreed on differentiated provisions concerning partial early retirement.
"We will therefore be able to retain experienced personnel of considerable competence and to offer partial early retirement to a greater extent in areas where tasks will no longer be required in the future.
“The agreement reached takes into consideration the interest of employees in shaping their working life in a flexible way at the same time as increasing our flexibility. This is an essential prerequisite for improving our competitiveness."
