Volkswagen plans to freeze pay for 660,000 staff until 2030, works council says
VW's global works council says management has told HR chiefs worldwide to plan zero pay rises until 2030. The carmaker calls it speculation; IG Metall warns of a 10% loss in purchasing power and a 'fierce' fight ahead.
Volkswagen plans to freeze pay for its more than 660,000 employees worldwide until 2030, the carmaker's European and Global Works Council said on Monday, 19 October, confirming an earlier report by the Süddeutsche Zeitung based on internal documents. According to the employee representatives, the group's board has instructed HR managers around the world to plan 'zero rounds until 2030', keeping pay at its current level and suspending all increases. They say the guideline has applied since the start of October and breaks with VW's practice of budgeting for inflation compensation and negotiated raises.
Volkswagen declined to comment. 'We do not comment on such speculation,' a group spokesperson said, adding that pay issues of any kind must first be discussed internally, in negotiations. The spokesperson told Reuters that a new round of talks later this week would be the forum for any proposals on labour costs. The Süddeutsche Zeitung reported that the new global management guidelines, in force from the fourth quarter, also include cuts to variable pay, special payments, benefits and jobs. Handelsblatt reports that promotions and regradings are currently suspended in Germany as well.
The works council called the plan 'absurd' and 'rather unrealistic' and said it expects strong resistance. It calculates that, if prices keep rising as in recent years, four years without raises would cut real pay by around 10% or more, and points out that personnel costs make up only about a seventh of VW's revenue. IG Metall said management had not yet approached it with any such demand: 'At Volkswagen, pay is decided at the negotiating table, not by decree from the executive boardroom.' The union, which is demanding a 5% rise over 12 months, warned that the board 'will reap what it sows'.
The dispute comes as chief executive Oliver Blume pushes the deepest restructuring in Volkswagen's history. In Germany the group employs about 275,000 people, around 130,000 of them under VW's in-house wage agreement. Last month the company gave notice on 10 of its 13 in-house collective agreements with effect from 31 December; the December 2024 deal that rules out compulsory layoffs and plant closures until the end of 2030 remains in force. Pay is negotiated locally with each country's unions, so it is unclear how the freeze would be applied. When the terminated agreements expire at the end of the year, the peace obligation also ends, which means strikes could be possible at VW in Germany from January.