After months of taking a beating in the media thanks to the emissions scandal, Volkswagen was in desperate need of some positive press to hit the news cycle. And they might have just struck gold.
If there’s one way to cut through a series of negative cycles, it’s to cut through them by announcing that is giving out pay raises to workers.
Volkswagen to Increase Wages by 4.8%
VW recently announced they have agreed to increase wages by 4.8 percent for German industrial union workers, a welcome increase in a flat economy. The raise will impact more than 120,000 workers who will see 2.8 percent in September and another 2 percent next August. That may not seem like much, but when your company is facing billions in settlement costs over a recent scandal, people expect layoffs, not raises. Bucking this trend means a very unique news cycle for Volkswagen.
And this isn’t just a PR win for the company. Worker’s right groups and representation drew a line in the sand after the scandal hit the papers—if you try to make this our fault, it will come back to bite you. Apparently VW is listening.
More than a PR Stunt
Some are saying these raises are nothing more than a reflection of what many other industrial workers in Germany can expect to receive. But the nature of this situation is different. VW is dealing with a stagnant economy AND plummeting sales. Pure number crunchers could forgive them if they skipped this round of raises in favor of getting profits back in line.
But it appears the company realizes it needs internal buy-in from workers if it’s going to dig itself out of this hole. Plus, the announcement sure plays well in the press. Both of these are legitimate concerns for a company facing global crises and potential crises inside and out.
So, congratulations go to VW for finding a way to paint a brighter picture in the midst of a big mess, and to simultaneously show their commitment to the people who make the cars that help them make their money.
Roman Temkin is an entrepreneur based in NYC.