Volkswagen has communicated the global halt to salary increases until 2030 in internal documents to international management, which affects more than 660,000 employees.
For Germany, promotions and regroupings will also be suspended until the introduction of a new pay system, which is planned for January 1, 2027.
The new pay system is intended to simplify classifications and save six percent of personnel costs in the long term; The works council estimates a possible real wage loss of around ten percent by 2030.
The works council considers a uniform zero pay rate to be unlikely, as collective bargaining issues are negotiated decentrally, and points to possible strikes in the metal and electrical industries as well as at Volkswagen.
Dusseldorf. Volkswagen wants to further reduce its personnel costs worldwide. According to internal documents for the international management of the world's second largest car company, employee salaries are to be frozen at the 2026 level until 2030. The global company works council confirmed a corresponding report in the “Süddeutsche Zeitung” on Monday.
The employee representatives found out about the plan at the end of last week when the board presented it at a joint meeting of international committees. The company declined to comment. According to the employee side, the requirement has been in effect since the beginning of October. Human resources managers worldwide have been instructed not to plan any collective wage increases.
More than 660,000 employees would be affected. How the requirement can be implemented in individual countries remains to be seen. Wages are negotiated locally with the respective collective bargaining parties. However, the group requirement creates a new framework for this.
In Germany, around 275,000 employees work for Volkswagen and its subsidiaries. Around 130,000 fall under the VW in-house tariff. Collective bargaining is already underway for the metal and electrical industries; this also includes Audi, Porsche and MAN. The VW in-house tariff round follows with a time delay. IG Metall is demanding five percent more money within twelve months. The employer side has not yet officially presented its demands.
Until now, VW had planned money in its global budgets to compensate for inflation and for tariff increases. This leeway should now disappear. Bonuses and special benefits could also be reduced. In addition, employees should work more productively and flexibly, overtime should be reduced and more jobs, especially outside of production, should be eliminated.
How much each brand and which location should contribute is an open question. If salaries remain unchanged while prices rise, purchasing power is likely to fall significantly. The works council believes a real wage loss of around ten percent or more is possible by 2030. The actual value depends on inflation and collective bargaining agreements.
In the 2024 austerity package, employees had already foregone an agreed increase of 5.5 percent for the company tariff. At that time, management and the union also agreed on a new pay system, the largest restructuring of the VW salary structure in decades. The aim is to simplify the current classifications and save six percent of personnel costs in the long term.
The change is actually planned for January 1, 2027. However, doubts are growing internally as to whether the deadline can be kept. Promotions and reassignments will remain suspended until the new order is introduced. According to information from corporate circles, this could affect “several thousand” employees in Germany. In addition to collective bargaining, individual salary developments and career paths are also stalling at VW.
The works council considers a uniform zero rate for all countries and companies to be unrealistic. Tariff issues would be negotiated decentrally; Unions could demand increases and, if necessary, enforce them through industrial action.
The employee representatives criticize the plan and demand an explanation from the board to the workforce. She points out that products, technology and demand also determine competitiveness. VW is under pressure because of, among other things, the weak Chinese business, the problems at Audi and Porsche and US tariffs. The austerity measures already include cuts in jobs, capacities and models.
In total, more than 100,000 jobs in the group will be at risk by the end of the decade. The zero round plans are likely to further exacerbate the conflict with employees. It remains to be seen whether this will actually lead to salary freezes. Strikes are possible in the metal and electrical industries from November, at VW from January.
