Equal Work for Equal Pay?

"We want to come closer to the monthly income within the VW concern," Jaroslav Povsik, a union boss at Skoda told the Süddeutsche Zeitung daily. "The quality of our work is just as high (as that of German workers)," he said.

After a one-day strike on Tuesday at Skoda's main plant at its Mlada Boleslav headquarters, employees went back to work on Wednesday as negotiations between the company and union representatives resumed. But union officials said they would hold more strikes if the talks stalled again.

Talks on Monday had failed to break the deadlock over a management offer of 10-percent base salary increases and other bonuses amounting to a rise of 13 percent over the period of April 2007 to April 2009. Unions rejected that offer last week. After they announced their intention to strike, management reduced the proposed 10-percent raises to 7.5 percent.

Less than a third of the pay

At around 22,000 koruny (790 euros, $1,070) monthly, Skoda workers earn on average the highest salaries within the Czech car industry and almost 10 percent more than the average Czech income. But they make less than one-third of what German automotive industry workers do.

Skoda Auto earned record net profits of 11.06 billion koruny (392 million euros, $530 million) last year, an increase of 40 percent over the previous year. It is the Czech Republic's largest exporter, responsible for 7.7 percent of total sales abroad last year and an estimated 2.0-3.0 percent of the country's Gross Domestic Product. The company employs around 28,000 people.

Last week, Czech President Vaclav Klaus called on company managers not to "raise wages too much."

"As an economist, I cannot underestimate the signal that a pay deal at Skoda Auto will have for the rest of the economy," he added.