Volkswagen grants 10% pay rise to workers at US plant amid Omnicron fear

Volkswagen AG will give workers at its assembly plant in Chattanooga, Tennessee, a 10 percent pay rise, the company’s US business leader said. The increase is a consequence of the new Omicron variant in an already tight labor market.

The large auto company reported sales of 3,750,030 vehicles last year in the United States, up 15% from the previous year.

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This sale was led by Atlas, a three-row SUV made in Chattanooga and Volkswagen Tiguan, a mid-size SUV. Volkswagen has also delivered 16,742 units of its ID.4 electric SUV. The company also plans to produce this model at its Chattanooga plant in the second half of 2022.

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Volkswagen’s U.S. unit CEO Scott Keogh said industry-wide U.S. auto sales are expected to be stuck at 15.5 million this year due to the shortage of semiconductors. At the same time, the auto industry is experiencing high rates of absenteeism due to the spread of the virus. “Will there be challenges in the ecosystem of suppliers and factories with absenteeism caused by omicron?” 100%, “Keogh said.” But if you have more chips, you will gain shares, and if you earn shares, you will gain a competitive advantage, “he added.

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The company’s Chattanooga plant is currently closed for the holidays and due to the flea crisis. It will resume its work from January 10. Although the plant is not operating at full capacity due to the semiconductor shortage, Keogh hopes to meet the inside sales forecast target. He also added that electric vehicles will get the first preference over chips. The automaker is also set to unveil the European version of ID.Buzz, an electric iteration of its iconic hippie-era microbus, on March 9. The three-row version of the electric vehicle will not arrive in the United States until 2023 or 2024 and will have to be imported, Keogh informed.

(With contributions from Bloomberg)