Volkswagen (OTC:VWAGY) (DE:VOW) on Wednesday became the latest foreign carmaker to raise wages for its U.S.-based factory workers. The pay hike follows a six-week walkout by United Auto Workers against Ford, General Motors, and Stellantis.
Indeed, the automobile manufacturer said it would increase salaries by 11% for workers at its Tenessee assembly plant. The changes are expected to take effect starting next month, with a “compressed wage progression timeline beginning in February.”
Meanwhile, the recent development at Volkswagen trails similar actions at Honda (NYSE:HMC), Toyota (NYSE:TM), and Hyundai (OTC:HYMTF). With labor unions intensifying pressures, the companies have also increased pay for their U.S.-based workers.
With the streak of pay hikes, UAW president Shawn Fain plans to leverage the momentum to push other carmakers to undertake similar changes. “We are going to organise like we’ve never organised before, because our strike has shown the Nissan worker in Alabama, and the Volkswagen worker in Tennessee, and the Toyota worker in Kentucky, and the Tesla worker in California that when union members win, the entire working-class wins,” he said.
What is the Target Price for VWAGY?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on VOW stock based on seven Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. With a 22% decline in its share price over the past year, the average VOW price target of €138.50 per share implies 17.47% upside potential.
