Volkswagen apparently wants to freeze salaries

According to the works council, the car manufacturer Volkswagen wants to freeze the salaries of its approximately 660,000 employees worldwide until 2030.

“The Group Board of Directors has instructed human resources managers worldwide to 'zero rounds until 2030', i.e. to freeze the current tariff level and suspend any wage increases," IG Metall reported on Monday with reference to information from VW's European and Global Works Council to the workforce.

This confirmed the company's plans, which were first reported by the Süddeutsche Zeitung. The newspaper cited an internal paper called the “Group Target Picture.” There was talk of a realignment in international collective bargaining. The measure also includes variable remuneration, special payments and other benefits. It is said that cuts are possible here. VW did not want to comment on the report to the ARD financial editorial team.

Works council expects resistance

The employee representatives described the plan as unrealistic and said they expected strong resistance. According to the works council, the group board's instructions have been in effect since the beginning of October. This means that Volkswagen is departing from previous practice, in which inflation compensation and scope for decentralized collective bargaining were always included in the personnel cost budgets.

If the board gets through with the guidelines, employees will face losses in purchasing power of an estimated ten percent or more by the end of the decade. In Germany, the Wolfsburg car company employs around 275,000 people, 130,000 of whom fall under the VW company tariff. The collective agreement with IG Metall applies to the VW subsidiaries Audi, Porsche and MAN.

“Wishful thinking on the part of employers”

Volkswagen's demand is therefore the subject of collective bargaining negotiations that have already begun. “Such wishful thinking on the part of the Wolfsburg employers cannot become reality,” explained the VW works council. The employers have not yet officially submitted their demands for this. “The zero round plan now gives a first foretaste,” added the union.

IG Metall is demanding five percent more money for Volkswagen employees and the approximately 3.7 million workers in the metal and electrical industries nationwide. In the union's view, wage cuts will not solve the structural problems of the auto and metal industries. The ‌proportion of labor costs ‌is low anyway.

Comprehensive savings plans

The Volkswagen Group has already decided on extensive cost-cutting measures. 50,000 jobs are to be cut worldwide. In addition, some plants are facing closure.

According to the information, no "competitive subsequent occupancy" has been found for the plants in Emden, Hanover, Zwickau and the Audi site in Neckarsulm. VW plans to present concepts for possible continued operation - also with other tasks - next year.