(Adds detail on wage increase, background)

 
   By Max Bernhard 
 

Volkswagen AG (VOW.XE) and Germany's biggest union, IG Metall, have reached a wage agreement, the union said Wednesday.

Eligible employees will receive a 4.3% wage increase--effective May--and a one-off payment of 100 euros in April, the union said.

The agreement, which is valid until 2020, affects 120,000 of the car maker's employees, including those at Volkswagen's financial services business.

Initially, employers and the union had failed to come to an agreement, leading the union to call for warning strikes that thwarted production at some sites. IG Metall had previously demanded a 6% wage increase.

Write to Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard

(END) Dow Jones Newswires

February 21, 2018 05:38 ET (10:38 GMT)

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