Nearly two years ago, Volkswagen made a promise to its employees. No layoffs for work-related reasons, no factory closures, in addition to new investments and products for German sites. Employees paid the price for this by reducing bonuses and allowances, suspending wage increases, and eliminating 35,000 jobs.
The conditions of the automobile industry have deteriorated significantly since then. In light of the new austerity plans announced by Volkswagen management, led by group president Oliver Blume, employees asked a question: Do these promises still stand?
A meeting was held a few days ago between company officials, the metal industry union, and the workers council again around the negotiating table. Below is an overview of the most important questions and answers, according to what was revealed by Der Spiegel magazine.
What is the crux of the matter?
This is the second round of talks in this format. It is important to note that this is not a matter of negotiations, but rather a review of the Future Wages Agreement for 2024. The basic condition for this is that the basic framework terms of the agreement have changed, in the opinion of one of the parties to the agreement. Therefore, this system allows both parties to force the other party to enter into talks.
The workers had invoked this clause in mid-September and demanded, in the wake of the austerity decisions taken by Volkswagen's supervisory board, clarification on whether and how Volkswagen would stick to the promises contained in the hard-won agreement. In return, the administration also requested talks to clarify the reasons why the austerity measures agreed upon at that time are now insufficient.
A disappointing start
The first round of talks yielded little results. According to the workers union, the company expressed great doubts about its ability to implement the investments agreed upon in the 2024 agreement in new models and factories. Thorsten Gröger, head of the Metallurgical Industry Union branch in Nieder Saxony, said afterwards that they were disappointed and angry. The union now expects responses to the list of questions it submitted.
Arne Maiswinkel, head of personnel at the main Volkswagen brand, rejected these accusations at the time, saying: “Volkswagen adheres to contracts.” Accordingly, the aim is to firmly implement the measures agreed so far and exploit all other possibilities to reduce staff numbers in a socially acceptable manner.
A struggle on two fronts
What makes the matter so complicated is the fact that these talks initially have nothing to do with the upcoming round of collective negotiations. However, the developments partly overlap. On September 23, the union had already demanded a five percent wage increase for Volkswagen employees.
In turn, the company announced, after the first "review conversation", the complete or partial termination of ten collective agreements as of December 31, 2026, including the framework collective agreement that includes, among other things, working hours and vacations. Other agreements regulate, for example, the classification of employees into pay categories in addition to allowances. But not all provisions contained therein will be immediately repealed.
This specifically includes Volkswagen employees in Germany. This includes Volkswagen's Passenger Cars and Commercial Vehicles Division, Components Division and Group divisions. The internal collective agreement applies to approximately 130,000 people.
Competitiveness is paramount
Volkswagen seeks to improve its competitiveness and reduce costs. According to the company, there is a need to amend some clauses in the contracts in light of the current pressures on costs.
According to Maiswinkel, the economic conditions have seriously worsened for the sector and thus for Volkswagen as well. He said: "These changes in the market are structural and profound. Among other things, Chinese manufacturers are putting pressure on the European market with their cheap export products." According to his opinion, the measures contained in the future plan must be implemented quickly and in a logical sequence.
Future plan 2030?
In light of the problems facing the company in early September, Volkswagen's Supervisory Board approved this plan presented by the Management Board.
This plan aims to significantly increase Volkswagen's profitability. Since then, management has been tasked with restructuring the group and saving billions, as well as raising operating profit by 2030 to 9 euros out of every 100 euros of revenue. This figure was recently 3.80 euros.
At the global level, the executive management intends to eliminate 50,000 jobs in the coming years in addition to the current reduction programs. Each brand will plan for this. Half of this number may be located in Germany. Moreover, the future of Volkswagen's plants in Emden and Hanoveruetswickau, as well as the Audi site in Neckarsulm, remains uncertain after 2031 and until 2034.
Options on the table
All options are now on the table at Volkswagen. According to the group's statements, ending collective wage agreements aims to open a space for negotiation that also includes the austerity measures contained in the "Future Plan." But the specific changes Volkswagen seeks to achieve in these agreements remain unclear yet.
At the same time, the Metallurgical Industry Union demands an increase in wages. It is considered unlikely that all these aspects will be negotiated separately. Negotiators are also unlikely to be able to ignore the future of Volkswagen's factories, which are threatened with closure. Talks should begin in early December at the latest.
However, the risk that Volkswagen's production lines will stop soon is small. Unlike the collective bargaining round in the metals and electricity industry, Volkswagen's industrial peace commitment period does not end until December 31. After that, strikes may occur, which is not excluded.
Grüger believes that these layoff decisions represent a radical break with Volkswagen's corporate culture and a declaration of war on employees. Workers Council President Daniela Cavallo expected a "violent conflict at the beginning of the new year."
