Unions at Skoda in the Czech Republic have agreed to a wage increase of 12.7%.

The Czech news agency CTK reported that an agreement was reached yesterday (Wednesday) after warning strikes took place on Tuesday.

Skoda employs around 27,000 people in the Czech Republic who earn on average EUR800 a month. Unions were calling for a 17% increase.

Skoda lost production of around 1,500 vehicles on Tuesday because of the warning strikes which affected all three shifts and cost the company around EUR1.5m, according to local press reports.

During a visit to the Skoda plant at Kvasiny last week, Czech Republic president Vaclav Klaus criticised the wage demands at the country’s largest company, saying they were a “bad signal” for the country’s economy . He asked management not to agree to a big wage increase.

However, some politicians are saying wages could be higher. Skoda’s turnover rose 15.5% in the first quarter of this year and it sold 149,926 vehicles during the period. March was the most successful month in the company’s history with sales of 60,665 units.