THE KRAUTS PATCO MOMENT:

VW gets landmark deal with its union (Mark Landler, November 4, 2004, NY Times)

Volkswagen averted the first full-scale strikes in its history Monday, offering its factory workers a seven-year job guarantee in return for a 28-month freeze in wages.

The agreement, which came after a marathon bargaining session, achieves two equally important objectives for Volkswagen: It will cut the carmaker's labor costs by nearly a third by 2011, and preserve labor harmony at a company that is a German industrial icon. [...]

In a largely symbolic gesture, Volkswagen will make a one-time payment of €1,000, or $1,128, to the 103,000 workers covered by the contract. The company also pledged to invest in six plants in western Germany, which workers fear may lose production to lower-cost factories in the Czech Republic, Slovakia, and other Central European countries.

"We achieved our goal of securing jobs, not just for today but for the future," Hartmut Meine, the chief negotiator of IG Metall, said in the northern city of Hannover, where the talks were held.

Volkswagen said the agreement freed it from a labor contract that had higher pay rates than any other German carmaker, and imposed rigid rules on overtime and the hiring of new employees.

"From now on, new employees will work on the same level as our competitors," said Dirk Grosse-Leege, a spokesman for Volkswagen. "We never asked as much from workers as in this round of negotiations."

Volkswagen's face-off with the union had been closely watched as a test of whether German auto workers - and VW employees in particular - could maintain their privileged position as the best-paid, best-treated workers in an increasingly competitive global industry.

And the answer is, no.

Posted by Orrin Judd at November 4, 2004 9:25 AM