Czech Skoda takes back wage offer, strike likely

...Human Resources Director Martin Jahn said on Friday.

Management had offered an immediate 10 percent base wage rise, plus an increase in bonuses and other benefits raising the overall pay package by about 13 percent. It also had promised to raise wages further in 2008 if inflation exceeds 3 percent.

But the unions rejected the offer on Thursday, and plan a three-hour strike next Tuesday. They said further action including an indefinite strike could follow.

On Friday, Skoda said it was cutting its wage rise offer to 7.5 percent this year and 3 percent next year, plus benefits, for an overall increase of about 12 percent over two years.

"We are returning to our original offer and we are ready to negotiate on that," Jahn told Reuters.

Skoda is the largest Czech company, with sales of 203.7 billion crowns ($9.80 billion) last year, the country's largest exporter and a key customer for dozens of parts makers.

The Skoda Auto group employed 27,680 people at the end of 2006.

Union officials were not immediately available for comment.

Inflation ran at 1.9 percent in March, but analysts and the central bank expect it to rise further later this year.

The Czech economy grew at 6.1 percent clip in 2005 and 2006 thanks to export-driven companies like Skoda and there have been no major strikes in the past years.

Domestic consumption has begun to rise and the labour market has tightened with unemployment falling to 7.3 percent in March. The central bank is closely watching wage negotiations for signs of inflation pressures.