Linde AG has agreed on wage cuts with workers of its materials handling segment, in exchange for a guarantee that current German production sites will not close.

Linde said last week that the deal, which will see a reduction in salary levels and overtime bonuses but an increase in working hours, was expected to result in "tens of millions of euros" in the company’s annual profit.

To be effective in stages, the deal aims to reduce unit labour costs for Linde’s materials handling products.

Workers will receive a guarantee production will not move to eastern Europe.

However, the guarantees are valid for six years and subject to the company’s economic situation not changing.

Similar negotiations underway for German production sites of the STILL brand are expected to be concluded at the end of August.