VW Grants 14% Pay Hike to End Strike in Slovakia

Volkswagen AG has agreed to give its hourly workers in Bratislava, Slovakia, a 14.1% wage increase over two years. The deal ends the country’s first major strike in more than 30 years, according to the Financial Times.

Workers struck the plant last Tuesday after rejecting a company offer to raise their pay by 9% over two years. The union had demanded a 16% wage hike. Last week Prime Minister Robert Fico backed the worker demands, pointing out the dramatic gap in compensation between the country’s hourly auto workers and those in western Europe.

VW says employees will begin a series of pay increases with an immediate 4.7% boost retroactive to June 1 and a one-time bonus of €500 ($560). Subsequent hikes will come next year in January (4.7%) and November (4.1%). The new pact will expire at the end of August 2019.

Slovakia has become an automotive production powerhouse with the world’s greatest output per capita. The FT notes that car plants operated by Kia, PSA Group and VW already make more than 1 million vehicles per year. PSA and VW are expanding capacity. The country also will open a €1.4 billion ($1.5 billion) Jaguar Land Rover factory late next year with initial capacity to make 150,000 vehicles.