Volkswagen AG, Europe's largest automaker, failed to agree with unions on a new contract for 90,000 German workers who are demanding a 4.2 percent wage increase, forcing the postponement of talks until Sept. 17.
Volkswagen and labor representatives met today in Hanover, Germany, for a second round of contract talks. The previous agreement expired at the end of July. In addition to raises, union leaders are seeking better conditions for part-time work for older employees.
"The workers didn't deserve a waiting game, but rather a quick agreement," Hartmut Meine, IG Metall director for the region of Lower Saxony, said after the negotiations. Volkswagen needs to make a "sustainable" offer at the next round of talks, he added.
Volkswagen proposed a performance-related bonus for workers during the first round of negotiations on Aug. 20. At the time, the company said it would approach the contract talks with a "watchful eye on the difficult 2010 year."
The Wolfsburg, Germany-based maker of the Golf compact has benefited from a government program offering new-car buyers 2,500 euros ($3,580) to scrap their older models. The 5 billion- euro program is due to run out of cash this month.
Volkswagen's deliveries slipped 3.5 percent to 3.65 million vehicles for the first seven months of the year, compared with a 16 percent drop for the global car market.
