Agreement in sight on VW plan

The German car group Volkswagen is looks set to get agreement to a controversial plan which would create 5,000 new jobs but at lower pay rates and working longer hours. The agreement, covering two Volkswagen plants in Germany, has been under discussion for months and is known as the "5,000 times 5,000 model" because as well as creating 5,000 new jobs through the introduction of a new model the workers would be paid 5,000DM (£1,585) a month. Taking into account normal shift premia this would be below the agreed rates. However, the main sticking point in the negotiations so far has been working time. The company originally wanted the new employees to work up to 48 hours a week at times of peak production, although it has now reduced this to 42.5.

The union, IG Metall, has been willing to discuss flexibility but has insisted on keeping to a basic 35-hour week. It feared that accepting longer hours for these new workers would result in other employers coming to it with similar demands.

This was the issue on which negotiations broke down in July. However, an intervention by the German Chancellor Gerhard Schroder last month has led to preliminary discussions restarting, with full negotiations planned for this month.

It remains to be seen how the two sides can reach agreement but with unemployment in Germany growing again, the pressure to do so is considerable.