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VW Presses for Increased Work Week at Same Pay

DW staff (jen)June 13, 2006

Amid massive financial problems, Volkswagen said it aims to get more bang for its euro by boosting the work week to 35 hours in six German factories.

Are VW's hands tied by tariff agreements? Or can it make employees work longer?Image: Bilderbox

"We plan to return to a 35-hour work week," VW personnel chief Horst Neumann told reporters following exploratory talks with the IG Metall trade union on Monday in Hanover.

Extending the work week from the current 28.8 hours to 35 without concomitant pay increases essentially amounts to a 20 percent pay reduction for workers.

Chief IG Metall negotiator Hartmut Meine rejected the suggestion, telling reporters: "There will be no tariff discussions with Volkswagen," and asked how the company planned to square its current surplus of workers with a longer work week.

VW Logo
The automaker has 20 percent higher labor costs than the competitionImage: AP

"Right now we don't have enough work to keep all employees busy with a 28.8 hour week," Meine said.

Volkswagen's four day, 28.8 hour week was part of a tariff deal struck in 2004 that aimed to save 30,000 jobs at the six western German plants. The deal was seen as extremely innovative at the time. However, pay was not lowered in lockstep with working hours, and VW's labor costs are now 20 percent higher than its competitors'.

Buyout packages offered

The 2004 accords also included an agreement not to lay off workers until the end of 2011. But in the wake of the IG Metall talks, Neumann affirmed the management board's position that the company needs to severely cut back on personnel. He said it would be "very, very difficult" to retain all 100,000 jobs currently held in the six factories in question; up to 20,000 jobs could eventually be cut.

Recently, the concern began offering its workers sweetened buyouts and early retirement deals.

Sanierung Aufsichtsrat Volkswagen
Workers are currently covered under a deal that protects jobs through 2011Image: AP

Neumann said it would be ideal if the proposal for a longer work week simply went through on the first try, but added, "That won't happen."

In the negotiations Monday, VW suggested a three-step restructuring model, which includes improving productivity, lowering production costs, and increasing efficiency. No further details were available. A second round of talks is planned.