A strike over pay at six German factories owned by Europe’s largest carmaker Volkswagen has been averted after a deal was struck with unions, the BBC reported.
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“A compromise has been found,” Waldemar Drosdziok of the IG Metall union told the broadcaster. “Both sides emerge as winners.”
The report noted that the strike had initially been called over a wage dispute, though the resolution reached includes job guarantees until 2011. In return, the unions accepted a two-year pay freeze and a one off payment.
The BBC noted that investors were “spooked” by the deal, in particular by the job guarantee which will make it difficult for Volkswagen to reduce its labour costs by 30% over the next seven years as it had intended. Consequently, Volkswagen’s shares fell 2% immediately after the announcement, it added.
