Union cautions Volkswagen could face protests if wage talks ignored

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Volkswagen, Europe’s biggest automaker, did not make a firm pay offer in a second round of talks on Monday. It said both sides initially need to concur the scope of structural reforms such as modifications to early retirement rules prior to VW is able to make a proposal on specific pay portions.

IG Metall, which is Germany’s most significant trade union, is calling for a 5 percent pay hike for employees at Volkswagen as well as for about 3.8 million engineering and metalworking personnel across German industry. It is looking for a one-year wage offer.

Volkswagen has stressed the need for a “determined settlement” as the group battles with the costs of its diesel emissions scandal. VW suffered its biggest operating loss last year after setting aside 16.2 billion euros (12.67 billion pound) in provisions to help spend for the scandal.

Companies in Germany’s metal and engineering industry have actually offered only 2.1 percent more basic pay and a 0.3 percent one-off payment for two years. The offer last week sparked a wave of cautioning strikes involving thousands of workers at companies including carmakers Daimler, BMW and commercial group ThyssenKrupp.

“Whoever is aiming to hide behind the industry talks must expect the anger of (Volkswagen) workers,” stated Hartmut Meine, the union’s primary pay mediator, adding Volkswagen was provoking its staff by neglecting the union’s pay claim.

“The employees know ways to defend themselves,” Meine stated.

Volkswagen told it was dealing with enormous upfront financial investments in electrical vehicles and new digital features to assist protect tasks in Germany as it is faced with growing competitors from innovation firms such as Google.

“The wage round is happening under still tough conditions,” said Volkswagen brand personnels primary Martin Rosik.

Both sides will resume settlements on May 19. If no arrangement is reached by May 31 when present wage contracts at Volkswagen expire, IG Metall might require short-term strikes.

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