[BERLIN] Volkswagen AG said on Thursday it has reached an agreement with the IG Metall labour union in pay talks for 115,000 workers at its western German plants and its financial services division.
Germany's largest union demanded a 5.5 per cent pay increase and wants VW to increase the number of apprenticeships per year.
IG Metall last month dismissed an offer by Europe's largest carmaker to raise wages by only 2.2 per cent and to create 2,800 apprenticeships in 2015 and 2016.
The union has since agreed with employers in Germany's southwestern state of Baden-Wuerttemberg to raise wages for metal workers by 3.4 per cent for one year.
The Feb 24 wage deal, seen as a pilot agreement for other sectors, also includes a one-off payment of 150 euros (S$227).
VW said details of the new pay accord will be announced at a joint press conference with IG Metall at 0900 GMT.
Current salary contracts for 115,000 workers at VW's six western German plants and its financial services division expire on Feb 28.