HANOVER (AFP) - Management and unions at German auto maker Volkswagen announced that they had reached an agreement that will bring an end to their long-running wage dispute and probably stave off strike action.
"We have found a compromise," a representative of IG Metall, the country's biggest industrial union, said in Hanover, northern Germany after some 26 hours of virtually non-stop talks between the parties.
The deal includes a concession from the union on wages in return for a long-term employment guarantee for Volkswagen's 103,000 workers at six plants in Germany, the spokesman said.
Under it, employees receive a one-off 1,000-euro (1,272-dollar) payment in March next year and a pledge of job security until 2011. In return, they will agree to a pay-freeze for 28 months, he said.
The compromise, reached after eight rounds of talks over several weeks, appears to have brought an end to any fears of protracted industrial action.
Tens of thousands of workers had held short warning strikes at two Volkswagen plants on Tuesday to try to increase pressure on the negotiators.
The auto giant serves a "social laboratory" in Germany, with its wage agreements often being used as a precedent for other companies in the industry.
Economy Minister Wolfgang Clement hailed the collective wage agreement as "a very positive signal from Germany's point of view." He said it showed, above all, that problems can be solved here without labour disputes.
In the end, the Volkswagen managers appeared to have come out on top, ceding ground on just one of their main demands.
The company had been seeking a two-year wage freeze for the 103,000 staff on its German assembly lines and a 30-percent reduction in labour costs by 2011.
IG Metall was seeking job guarantees for 10 years and a four-percent increase in wages. But it had signalled it would accept a two percent increase if it could obtain an "acceptable" solution with regard to the job guarantees.
VW's management previously issued a veiled threat to relocate jobs abroad or increase production outside of Germany if it failed to push through substantial cost-cutting plans aimed at reducing production costs by 30 percent by 2011.
The company has substantial manufacturing capacity in Slovakia, the Czech Republic, Poland, Mexico and Brazil.
A similar tactic was used recently by German-US rival DaimlerChrysler to persuade its workforce to agree to tough belt-tightening measures.
IG Metall's chief negotiator, Hartmut Meine, spoke of an "reasonable compromise" but he did acknowledge that the union representatives were forced to "swallow some bitter medicine".
VW's chief negotiator Josef-Fidelis Senn, meanwhile, said that: "The result means job security and cuts costs, which is absolutely vital for us."
11/03/2004 - 16:39 GMT - AFP