For Some Weird Reason, Volkswagen is Having a Hard Time Agreeing to Union Pay Hike Demands

Steph Willems
by Steph Willems

It just posted its largest loss ever and is up to its eyebrows in scandal-related expenses, so what’s an automaker to do when the hands come out asking for more?

That’s the situation in Wolfsburg, Germany, where the scandal-rocked Volkswagen and its workers’ labor union find themselves engaged in an uncomfortable dance, according to Automotive News Europe.

The union, IG Metall, says the automaker’s diesel emissions scandal is no excuse for holding back raises to its 120,000 staff members, and Volkswagen says, “What? Sorry, can’t hear you — we’re driving into a tunnel…call back later.”

IG Metall is seeking a five percent pay raise for the workers. Volkswagen, meanwhile, just plummeted from prosperity to a 4.1 billion euro ($4.6 billion) operating loss for 2015, and just had to set aside $16.2 billion euros ($18.2 billion) to pay its U.S. settlement costs.

In addition to that, it has proposed to cut its stock dividend by 97 percent, possibly certainly irritating investors. Oh, and there’s still lawsuits and fines to deal with.

Volkswagen’s human resources chief Martin Rosik was heard saying that a “measured settlement is more important than ever,” outside of a wage meeting today.

Though the company says its hands are full and pockets empty, the union is not having any of that.

“Workers on the assembly line, at the foundry or in administration have not carried out manipulations,” said Hartmut Meine, the union’s main pay negotiator. “That is why the workers will not pay the price. Others have to take the responsibility.”

If Volkswagen doesn’t acquiesce to the union demands, IG Metall could have its workers on the picket line on May 31, the day their wage contract runs out. Before that happens, the union wants the employer to table its offer to employees at a May 2 meeting.

Steph Willems
Steph Willems

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  • Pricha33 Pricha33 on Apr 26, 2016

    I just heard on our local news that VW sold more cars worldwide in the first quarter than any other automaker. Sure it was Europe and China that led the way , but scandal only appears to the North American market so any over capacity would be limited to USA/Canada.I guess the VW vehicles must appeal to a broad market, you can't tell me they are the only option in these foreign markets. My TDI continues to be good to me, and I might even consider an upscale VAG product soon.

    • Tedward Tedward on Apr 27, 2016

      It goes beyond that even. One of the more interesting aspects of all this is that the scandal itself removed inventory. VW dealers are in the news lately demanding increased inventory of cars that they can legally sell in the US. If there are any US specific tdi components then vw is likely facing oversupply of those right now, but I'm not even sure if that's a thing anymore with the recent near leveling of emissions targets. This is a bizarre situation, a regulatory violation that has a supply effect more similar to a natural disaster, like the Taiwan floods.

  • This will be resolved with a 1.5% annual raise, a free used TDI for each employee, and Audi work shirts to replace all of their uniforms with VW logos on them.

  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
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