April 4, 2018 / 8:32 AM / a year ago

VW's Skoda unions raise stakes in wage hike demands

FILE PHOTO: A Skoda Kodiaq Scout car is seen during the 87th International Motor Show at Palexpo in Geneva, Switzerland March 8, 2017. REUTERS/Arnd Wiegmann/File Photo

PRAGUE (Reuters) - Unions at Volkswagen’s (VOWG_p.DE) Skoda Auto have withdrawn from a deal on flexible working shifts, they said on Wednesday, adding pressure on the Czech carmaker as they seek a double-digit pay raise and threaten strikes.

Union leaders said in a statement more shift agreements could be canceled if wage talks broke down.

Unions have said they could call a strike in May if no deal is agreed and said on Wednesday they would seek a 14 percent wage rise for the next 12 months.

Last week, they rejected management’s offer of a 10 percent increase.

Strikes are a rare event in the central European country whose economic growth is propelled by the car sector.

With strong growth in recent years and unemployment dropping to its lowest level in two decades, wages have been rising rapidly across sectors, putting pressure on employers.

Skoda, the country’s biggest exporter, has blossomed under nearly 30 years of Volkswagen ownership to become one of the group’s profit drivers, even beating luxury brand Audi’s (NSUG.DE) and BMW’s (BMWG.DE) operating margins last year.

Reporting by Jason Hovet; Editing by Mark Potter

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