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Volkswagen and IG Metall successfully conclude pay negotiations

- Pay structure and orientation to regional collective agreement reaffirmed
- Base pay to rise by 3.2 percent
- One-time payment of 1 percent, minimum €500
Wolfsburg / Hanover, 08 February 2011 - Volkswagen and IG Metall brought their negotiations on the company collective agreement to a successful conclusion in Hanover on Monday night. There is to be a 3.2 percent increase in base pay effective May 1, 2011, and each employee will also receive a one-time payment corresponding to one percent of his or her annual pay but no less than €500. This means that the increase in base pay has been brought forward by eight months. Dr. Horst Neumann, Member of the Board of Management of Volkswagen Aktiengesellschaft responsible for Human Resources, said: “The company and IG Metall have found a fair solution that offers a very decent rise in pay while preserving competitiveness.” He added that Volkswagen’s collective agreement would continue to take its orientation from the regional collective wage agreement for the metal industry going forward. “That safeguards our competitiveness as part of this industry.”

The main points of the agreement are as follows:

One-time payment: Volkswagen and IG Metall agreed on a one-time payment for each employee corresponding to one percent of his or her annual pay but no less than €500. Jochen Schumm, chief negotiator for Volkswagen, emphasized: "Unlike a fixed sum, this represents a clear increase of one percent for everyone and has a social component."

Increase in base pay amounting to 3.2 percent: According to Schumm: "The rise in base pay keeps sight of the economic conditions for Volkswagen." He said that Volkswagen had for many years taken its orientation from pay developments in the metal industry, because: "Sustainable increases in base pay must be aligned to the industry’s economic performance. That is extremely significant for the competitiveness of Volkswagen’s sites in Germany."

Pay increase in brought forward by 8 months: Under the regional collective wage agreement for the metal industry, a pay increase would not come into effect until January 1, 2012. Schumm commented: "IG Metall concluded this regional agreement at a time of crisis. The economic situation has improved since then. Consequently, an increase for our employees that did not come into effect until the end of the year would not be appropriate. We will be bringing forward the pay increase by eight months to take effect from May 1, 2011."

Term: Unlike the term for the metal industry (23 months), the new company collective agreement has a term of 16 months (February 1, 2011 to May 31, 2012). Schumm said: "The shorter term brings us closer in line with the regional agreement. That underscores the orientation of Volkswagen’s company collective agreement to competition in the sector."
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