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Volkswagen Avoids Plant Shutdown, But It Has To Pay Up

This is a significant win for auto workers.

Last month, we reported on potential worker strikes that could have resulted in production shutdowns for Audi and BMW in Germany. As it turns out, Audi and BMW were not the only automakers that have been dealing with worker strikes. According to Automotive News Europe, Volkswagen has just agreed to wage increases for its workers in Germany to avoid a strike. The Volkswagen Group will raise the wages of 120,000 workers in Germany by 4.3% after the fourth round of talks were completed with labor union IG Metal.

IG Metal had threatened a worker strike after VW initially offered a 2.2% pay increase instead of the 6% that it was seeking. As part of the negotiated deal, workers in western Germany will also receive a payment worth 27.5% of their monthly wage once per year starting next year. Workers can also choose to take an additional six days off in lieu of the yearly payment. The labor union that negotiated the Volkswagen deal is the same group that represents that Audi and BMW employees as well. The positive news from all of this is that the German automakers will probably not have to deal with any unforeseen shutdowns.

IG Metal has also pushed for improvements with Volkswagen's pension plan and negotiated the hiring of more apprentices to cope with an industry shift to EVs and self-driving cars. This isn't great news for Volkswagen, a company that has already been paying out massive fines over its diesel scandal. It seems like a small price to pay considering that the company gets to keep its production lines open.

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