In a reassuring sign for Germany’s precarious manufacturing sector, VW agreed to extend the current 2011 employment guarantee for a further three years.

The first stage of the deal applies to 91,000 workers in the firm’s six western plants and factories – plus the Volkswagen Financial Services office in Braunschweig. A “performance-related remuneration component” was also agreed upon, as was

the hiring of apprentices based on how well they did during a training period.

In return, the company and employee representatives have agreed to work together to guarantee increased productivity.

The deal was struck between VW – which is Europe’s biggest car producer – and the main auto workers’ union, IG Metall. In a joint announcement on Tuesday in Hannover, they said the agreement would strengthen VW’s competitiveness.

Roughly another 8,000 workers in the eastern plants at Zwickau, Chemnitz und Dresden are expected to strike a similar deal in March.

The Lower Saxony district manager and chief negotiator for IG Metall, Hartmut Meine, said he was happy with the guarantee. It meant that more than 95,000 workers would be protected against layoffs for five years, he said.

“Workers have a safe job, are motivated and ready to contribute to an increase in productivity. That is the basis of Volkswagen’s success,” Meine said in a statement.

During the time of the economic crisis, firms in the metal and electronics industries could look to this deal as an example, he added.

As part of the deal, VW has committed – in accordance with collective labour agreements – to developing competitive industries relevant to car production, to secure workers jobs in the long term.