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VW Agrees to a 5.7% Pay Raise for Workers as Profits Surge

Volkswagen AG (VOW)Europe’s largest carmaker, agreed to raise wages for German workers by 5.7 percent over 20 months as the country’s biggest manufacturing union helped employees tap into the company’s growing profit.

VW will increase base pay by 3.4 percent as of Sept. 1 and another 2.2 percent as of July 1, 2014, the Wolfsburg, Germany-based company said in a statement today.

Contract terms are in line with an industrywide pay increase that the IG Metall union won in mid-May for about 770,000 manufacturing workers in the state of Bavaria. That accord is being used as a model for labor agreements elsewhere in the country. The VW pact, negotiated separately from IG Metall’s regional accords, covers 102,000 employees at six plants in western Germanyand the financial services unit.

Germany’s economy grew just 0.1 percent in the first quarter….”

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