Scandal-hit VW agrees to 4.8 percent pay rise for workers

Automaker Volkswagen and Germany's industrial union have agreed to increase wages 4.8 percent by next year in an economy where the cost of living is flat — the kind of raises that could help the 19-country eurozone lift inflation from dangerously low levels.

The company said Friday that almost 120,000 workers would get 2.8 percent more on Sept. 1 and then another 2.0 percent on Aug. 1, 2017.

Volkswagen is struggling to overcome the costs of a scandal over cars equipped with software that enabled them to cheat in diesel emissions tests. The company deducted 16.2 billion euros (currently $18.1 billion) from its earnings last year to cover recalls and other costs for 11...