Union Dos and Don'ts: Volkswagen Chops Salaries and Bonuses for Works Council Amid Investigation
Volkswagen has slashed salaries and suspended the bonuses of 14 members of its works council, including council head Bernd Osterloh, as officials investigate alleged overpayments. In May, it was made public that German prosecutors were looking into current and former executives at VW under suspicions that they paid the labor chief an “excessive” salary.
This was followed by a November raid, after which the council claimed the probe didn’t “target Osterloh.” Members specified that all payments were in line with Germany’s legal guidelines. The offices of VW’s chief financial officer, Frank Witter, and personnel director Karlheinz Blessing were also searched.
Osterloh once earned 750,000 euros (roughly $888,500) in a single year and up to 250,000 in other years. According to Reuters, the labor boss said he would now receive about €8,000 a month.
VW CEO Matthias Müller explained that the pay cuts were an attempt to play it safe until the case was clarified. “We thank the works council for taking this step,” Mueller said.
At present, the investigations revolves around suspected tax evasion. However, simply wasting corporate funds is a legal breach of fiduciary duties in Germany. The works council has maintained that Osterloh’s remuneration was appropriate. “Had he decided to accept an offer to become head of personnel, his remuneration would have been significantly higher. He instead decided to continue to devote his time to the workforce,” it said in a statement.
[Image: Volkswagen ]
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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Must be quite a position; to my American mind, the $888k pay and the job title don't match. I'm less interested in the tax evasion issue than how such high pay could, umm, persuade Mr Osterloh to see things the Volkswagen way.
VW is still a mess. How much additional mismanagement and incompetence is going on that never makes it to the public eye?