Sterling's strength scuppers Vauxhall workers' pay hopes
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Car workers at Vauxhall have become the latest group of Britons to be forced to share the risk of sterling's volatile exchange rate.
Car workers at Vauxhall have become the latest group of Britons to be forced to share the risk of sterling's volatile exchange rate.
Under a unique pay deal struck two years ago, unions agreed to a package for the 10,000-strong workforce which included an extra sum if the pound fell against the German mark.
If sterling had fallen below DM2.70 for two consecutive months they would have been line for a 0.5 per cent pay rise worth about £100 extra, after tax, on annual pay.
But sterling, which was hovering around DM3 when the deal was struck in April 1998, has since soared to peaks of DM3.40 and yesterday was worth DM3.24.
The workers will still get a 3.3 per cent pay rise, linked to the latest inflation figure, as well as a £700 profit-related bonus.
Nick Reilly, chairman of Vauxhall Motors, said the company as a whole had been hurt by the appreciation in sterling, which make it harder to export to Europe.
"Although half a per cent is significant and it is £100 to an employee, our manufacturing costs have been hit a lot harder than that because of the strength of the pound," he told BBC Radio.
"So it is sharing the pain but is certainly not an off-loading," he said.
The news comes a couple of days after Unilever, the Anglo-Dutch household products group, said it wanted to see more of its UK suppliers invoicing it in euros, effectively passing on the exchange rate risk. This came a fortnight after Toyota, the Japanese car maker with two factories in the UK, gave a similar signal.
Simon Buckby, campaign director for the pro-euro group Britain in Europe said yesterday: "Exchange rate volatility causes costs to Britain, in this case for British workers."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments