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

More by Steph Willems

Join the conversation
3 of 16 comments
  • 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.

  • Lynchenstein @EBFlex - All ICEs are zero-emission until you start them up. Except my mom's old 95 Accord, that used to emit oil onto the ground quite a lot.
  • Charles The UAW makes me the opposite of patriotic
  • El scotto Wranglers are like good work boots, you can't make them any better. Rugged four wheel drive vehicles which ironically make great urban vehicles. Wagoneers were like handbags desired by affluent women. They've gone out of vogue. I can a Belgian company selling Jeep and Ram Trucks to a Chinese company.
  • El scotto So now would be a good time to buy an EV as a commuter car?
  • ToolGuy $1 billion / 333.3 million = $3 per U.S. person ¶ And what do I get for my 3 bucks -- cleaner air and lower fuel prices? I might be ok with this 🙂🙂