German Paper: Payola At Opel

Bertel Schmitt
by Bertel Schmitt
german paper payola at opel

Sex and money are known as the world’s biggest motivators. Volkswagen used sex to make its shop stewards cooperative. This ended in a huge scandal. Opel is using money instead. “The system is the same as formerly at Volkswagen – only without sex,” writes Germany’s Frankfurter Allgemeine Zeitung in a long article about “illegal bonus payments” to members of Opel’s works council.

Under German law, the works council, consisting of elected representatives of the employees, is a powerful institution. Without its cooperation, a company grinds to a halt. The works council has to agree to hirings and firings. In a large company, half of the board members are representatives of the employees. At Opel, Über-shop steward Klaus Franz is the deputy chairman of the supervisory board. Great is the temptation to make the works council pliant.

According to the Frankfurter Allgemeine Zeitung, works council member receive up to $2,000 monthly, in addition to their normal pay. The “normal” pay of a shop steward can rise quickly. It also can drop after a failed re-election. The bonus payment for Klaus Franz is a secret.

Opel says the system is kosher. Law professors cited by the FAZ call it a “blatant violation of the law which requires that membership in the works council must be unsalaried.” If the payments are illegal, then they may not be booked as business expenses. The matter could also have tax implications.

“Commonly, what we have here would be called bribes,” says the FAZ.

Usually, these revelations are not the works of enterprising journalists. When the VW scandal broke, it was two months before a general election. The incumbent was Gerhard Schröder, a social democrat. He had been premier of Lower Saxony before, had been a member of VW’s supervisory board. The social democrats and the unions traditionally are close. Hurt the unions, hurt the social democrats. A few days after the first bits of the scandal became known, the New York Times wrote: “VW affair may hurt Schröder at the polls.” The unions were discredited, the social democrats lost heavily.

The current Merkel government is still holding a grudge against GM which had reneged on the Opel deal. The next elections won’t be until 2013.

Join the conversation
  • Buickman Buickman on Oct 17, 2011

    in the US we call it VEBA administration, fund management fees paid in exchange for plant closings and second tier wages.

  • Zackman Zackman on Oct 17, 2011

    Like it or not, things like this are a way of life in many areas - it's how folks survivie and how things get done. Whether "illegal" or not, it doesn't matter. Sometimes "laws" are on the books and looks good, but the reality is very different. Business ethics are often nice for appearances sake, but again, that area under the conference table can be very large and dark with lots of space to move around in!

    • Herm Herm on Oct 17, 2011

      this flexibility probably accounts for a large portion of German prosperity in auto manufacturing and their unions.. its grease on the skids. We could use some of this bribery to improve the economic conditions in the US.

  • Tassos And all 3 were ordered by Fisker's mother. Seriously, given Fisker's terrible record of Failure in the past, only an utter loser, (for example, VGhost or Art Vandelay?), looking for a BEV terrible enough to be a proper replacement of his 11 mile range Fiat 500E, would order one of these. (apart from Fisker's mother)
  • Tassos And all 3 of them were ordered by Fisker's mother.Seriously, after Fisker's DISMAL record of UTTER FAILURE in the past, only a GOD DAMNED MORON would order this one.
  • RHD Any truth to the unconfirmed rumor that the new, larger model will be called the bZ6X? We could surmise that with a generous back seat it certainly should be!
  • Damon Thomas Adding to the POSITIVES... It's a pretty fun car to mod
  • GregLocock Two adjacent states in Australia have different attitudes to roadworthy inspections. In NSW they are annual. In Victoria they only occur at change of ownership. As you'd expect this leads to many people in Vic keeping their old car.So if the worrywarts are correct Victoria's roads would be full of beaten up cars and so have a high accident rate compared with NSW. Oh well, the stats don't agree.