Volkswagen May Exit Employers' Group Over Labor Deals, FTD Says

Bloomberg, 24 June 2003

June 24 (Bloomberg)—Volkswagen AG, Europe's largest carmaker, may exit an employers' association in the German state of Saxony to avoid having to adhere to industrywide labor agreements between the group and unions in eastern Germany, the Financial Times Deutschland said, citing unidentified employees on the company's works council.

The carmaker is in talks with employee representatives to negotiate an individual labor agreement for the company, the newspaper said in an advance copy of a report in tomorrow's edition. Both sides are willing to compromise should the dispute escalate further, the paper said.

The carmaker is the biggest member of the association, which represents Saxony's metal and electronics companies, FTD said. Volkswagen's departure from the association would reduce the impact of any agreement achieved by striking metalworkers in eastern Germany.

About 9,000 workers have stopped work in protest at their hours, crippling production at companies from Volkswagen AG to Bombardier Inc., the world's largest producer of passenger railcars. The strikes in three states are entering a fourth week.