VW workers agree to 28-month pay freeze

Germany’s biggest industrial union agreed to a 28-month pay freeze in a deal with car maker Volkswagen today, receiving in return a guarantee that there will be no layoffs before 2011.

“We were able to reach a fair balance between the aim of securing jobs on one side and the company’s interest in reducing costs,” said chief union negotiator Hartmut Meine after talks that lasted through the night.

Meine said current pay levels would be frozen until January 31 2007, although employees will get a one-time payment of €1,000 next year.

VW has 176,400 workers in Germany, 103,000 of them represented by IG Metall. Meine said the company had guaranteed that no one would be laid off before 2011.