A compromise deal has been reached in a dispute at Europe’s biggest carmaker, according to union sources. It comes after thousands of Volkswagen workers in Germany downed tools in protest at the firm’s demands for a two-year wage freeze. Faced with slumping profits, the motor manufacturer is seeking to cut costs.

Union representatives were seeking a pay rise but are said to have made concessions in return for long-term job guarantees. The company had warned that 30,000 jobs could go at its six German plants unless workers agreed to its wage demands. Germany is home to the world’s best-paid car workers and Volkswagen staff earn a fifth more than other metalworkers in the country.

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