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UNIONS

Volvo Cars freezes salaries to avoid redundancies

Swedish car maker Volvo Cars announced on Thursday a freeze on salaries of all employees and slash executive pay in an attempt to avoid further redundancies.

Published: 12 March 2009 13:45 CET

“Volvo Car Corporation has today signed a unique agreement with the local unions which most probably means that the company can avoid further employee separations,” the Ford-owned car maker said in a statement.

“The agreement means that all employees – both white collars and blue collars – will contribute to lowering personnel costs in the company during 2009 through, for example, postponed salary revisions,” it added.

Volvo stressed that “the cost savings also include the company’s top management,” pointing out that 40 executives had accepted a five-percent pay-cut between April and December.

The company also said no bonuses would be paid this year or next.

“We are in an extreme situation with a continuing weak global market for new cars, especially in the United States and Sweden, and we need to take action to further reduce our costs,” Volvo Car CEO Stephen Odell said in the statement.

Volvo Cars, which was purchased by Ford in 1999 and which counts nearly 20,000 employees worldwide – 15,000 of whom work in Sweden – announced last years plans to slash more than 4,600 jobs.

The Swedish car maker was on Thursday waiting for word on whether it would receive a massive loan from the European Investment Bank (EIB).

WORKING IN GERMANY

German steelworkers agree 6.5 percent pay hike after strike

Tens of thousands of steel workers in western Germany will get a 6.5-percent pay hike this year - the biggest jump in three decades - in a settlement that could set the tone for industry as inflation soars.

Published: 15 June 2022 12:37 CEST
German steelworkers agree 6.5 percent pay hike after strike

The agreed increase would come into effect “from August 1st”, the IG Metall union in the region of North Rhine-Westphalia said in a statement Wednesday.

The 68,000 steelworkers in the industrial region would also receive a one-off payment of 500 euros for the months of June and July, the union said.

The outcome of the negotiations was “the biggest increase in wages in the steel industry in percentage terms in 30 years,” said IG Metall boss, Joerg Hofmann.

Germany’s largest union, IG Metall launched a strike action at steelworks in the west in May after management failed to meet its demands for an 8.2 percent pay increase.

On Thursday at the peak of the movement, around 16,000 workers across 50 firms downed tools, the union said.

READ ALSO: Should foreign workers join a German union?

“Rising inflation” and the “good economic situation” of the steel industry were the basis for IG Metall’s demands.

Consumer prices rose at a 7.9-percent rate in Germany in May, a record for the country since reunification in 1990 driven by the outbreak of the war in Ukraine.

The smaller number of steelworkers in the east of Germany, who are also seeking an 8.2 percent pay boost, have yet to reach their own agreement.

Negotiations are currently taking place in a number of sectors. In the textile industry, 12,000 workers in the east of Germany sealed a 5.6 percent pay increase at the beginning of May.

Meanwhile, negotiations covering the auto industry, and mechanical and electrical engineering will begin in November.

Despite the agreed rise the onus was still on government to relieve the pressure on workers form rising prices “in the coming months”, IG Metall boss Hofmann said.

Significant wage demands have prompted concerns of a wage-price spiral, where rising pay sustains higher inflation.

The European Central Bank last week said it would raise its interest rates for the first time in over a decade this July as it seeks to stamp out price rises.

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