Volkswagen To Pass Out 4.8% Workers Raise In Spite Of Emissions Scandal

Automaker Volkswagen and Germany’s industrial union have agreed to increase wages 4.8 percent by next year in an economy where the cost of living is flat — the kind of raises that could help the 19-country eurozone lift inflation from dangerously low levels.

The company said Friday that almost 120,000 workers would get 2.8 percent more on Sept. 1 and then another 2.0 percent on Aug. 1, 2017.

Volkswagen is struggling to overcome the costs of a scandal over cars equipped with software that enabled them to cheat in diesel emissions tests. The company deducted 16.2 billion euros (currently $18.1 billion) from its earnings last year to cover recalls and other costs for 11 million cars sold with the software worldwide.

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PUGPROUD - 5/20/2016 11:11:24 AM

+1 Boost

This is just an example of new senior management trying to calm down labor force and gain favor with them during a crisis. If things improve in a year well and good...if not financial cuts will only be deeper.

Vette71 - 5/20/2016 11:33:00 AM

+3 Boost

German workers are pretty well protected. Downsizing in Germany is very difficult to do and VW can't do much there. So the diesel scandal is unlikely a big worry. The real issue is that VW's cost structure is way too high versus its global competitors and this move makes that problem worse. They will price themselves out of markets.

MDarringer - 5/20/2016 5:33:03 PM

+1 Boost

This is 100% because they let the Union have too much control. A Union should only negotiate worker contracts and should have ZERO say in anything the company does. If the company does layoff, it does layoffs.

Unions are an anachronism that need to be abolished. They were created when there were no laws protecting workers. Most countries now have those laws. Thus, the union's time has passed.

#RightToWork