Volkswagen strikes below-inflation wage deal

STORY: Volkswagen agreed a two-year wage deal for workers at its western German factories Wednesday (November 23).

The automaker has offered around 8.5% more pay.

That is below inflation, which ran at 11.6% in Germany last month - but it is also above what other employers have agreed in recent weeks.

The deal affects around 125,000 VW employees.

Workers will receive a 5.2% wage hike from June next year, and another 3.3% from May 2024.

They will also get a lump-sum payment worth just over $3,000 after tax to help offset soaring inflation.

Unions across Germany and Europe have demanded higher pay to give workers relief from record inflation.

But a lot of employers have resisted this due to rising material and energy costs.

In Italy, unions representing workers at carmaker Stellantis called for an 8.4% pay rise.

The company called that 'heavy'.

Daimler Truck said earlier this month that unions were asking for an 8% raise, but mentioned that others in the industry were offering less.