German car-maker Volkswagen AG reached a wage agreement with the labor unions in Germany which represented around 120,000 of its workers, in line with union agreements in the region.
The company would increase worker pay by a total of 4.8%, which would be staggered in two phases, coming close to the union’s demand for a pay rise of around 5%. The wage pact is valid for 20 months.
The agreement with unions comes on the back of last week’s worker’s strike at VW’s plants in Wolfsburg, Kassel, Braunschweig and Salzgitter after the car maker failed to make a wage offer.
As per the new agreement, workers would receive a 2.8% wage hike in September 2016, followed by another 2% rise in August 2017, and concessions on profit-sharing and pensions, including partial early retirement.
Separately, Volkswagen’s Chief Executive Matthias Mueller plans to announce a new strategy in mid-June 2016 for its core autos business that it hopes would boost its profitability by 2025 once it emerges from the emissions scandal.