The new collective bargaining agreement with longer working hours valid for Volkswagen six traditional plants came into force yesterday (Wednesday). All key areas of production will now work at least 33 hours a week to produce automobiles and components, instead of the previous 28.8 hours.

"This takes us a big step nearer to competitive labour costs and safe jobs," Horst Neumann, VW board member responsible for human resources, said in Wolfsburg. "From today, many areas have begun working under the new framework which usually involves a five-day week."

The new working time agreement was the result of extensive negotiations between management and unions during the summer that were designed to improve competitiveness at Volkswagen's German plants. CEO Bernd Pischetsrieder had threatened to move Golf production away from Germany if improvements in costs and productivity could not be made.

The new working time is being implemented as follows: a weekly working time of at least 33 hours has been agreed with the works councils for employees directly employed in production at the Wolfsburg, Hanover, Brunswick, Kassel and Emden plants. Furthermore, a binding framework for additional paid working hours and overtime has been agreed for specific sites.

It is expected that working times in all sectors where final clarification is still pending will also be adjusted as soon as possible.

"It was an ambitious goal to start implementing the working time corridor as early as 1 November, even though the collective bargaining agreement is only a few weeks old. Together, we have made good progress, because competitive pressure is high and does not leave us any time," said Klaus Dierkes, VW's head of human resources for Germany.

In return for these working time arrangements, the company and the IG Metall union also agreed a pension element and concrete profit sharing arrangements for employees as well as production volume commitments for the traditional sites, said Volkswagen.