Czech Skoda Auto, Unions Reach Agreement for 3.5% Pay Hike

By Sean Carney

PRAGUE--Czech car maker Skoda Auto AS Friday said it has reached an agreement with labor unions centered on an across-the-board wage increase and other bonuses, thus averting a strike.

The company, a unit of Volkswagen AG (VLKAY), will increase wages by 3.5% while giving them a one-time 4,000 koruna ($157.8) bonus.

The new wage agreement takes retroactive effect from April 1 and expires at the end of March 2016.

The two sides also came to a new agreement on flextime work to enable continued employment in times of fluctuating workloads.

The company said it has also agreed to additional variable bonuses that when combined with other perks can reach CZK25,000 per employee for their contribution to last year's success -- the company produced more than one million cars in 2014, an annual record. This amount would be paid out in May.

All possible combined bonuses paid this year can reach an average of CZK60,000, the company added.

Unions in recent weeks went on strike alert over wages and briefly protested in front of all three of the company's main Czech production facilities.

Skoda Auto is the Czech Republic's largest exporter and a major employer. At the heart of the country's key automotive manufacturing sector, it serves as a bellwether of the central European country's economic health.

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