Volkswagen Group's management is considering freezing wages at most of its sites worldwide through 2030, though local media say much of the plan is likely to fall apart because collective agreements on pay increases have already been signed.
Sueddeutsche Zeitung reported on the 19th, citing internal group documents, that Volkswagen's management has drawn up new guidelines along these lines for plant-level collective bargaining set to begin in the fourth quarter of this year. The aim is to cut labor costs as part of a sweeping restructuring.
If management's plan proceeds as drafted, real wages for workers at Volkswagen in Germany could fall by as much as 10% over the next several years. As of the end of last year, Volkswagen employed 663,000 people at 111 sites worldwide. The newspaper said the company may not push through a wage freeze at every site worldwide.
At the Chattanooga plant in Tennessee, a collective agreement signed in February calls for annual pay increases of 3% to 6% through 2030. In Germany, IG Metall, the metalworkers' union, recently entered collective bargaining talks with management seeking a 5% wage increase. The company said it would not comment on such speculation. IG Metall pushed back, saying wages at Volkswagen are decided at the negotiating table, not by management decree.
Volkswagen's management and labor representatives agreed in December 2024 on a restructuring plan that included cutting 35,000 jobs in Germany and halting operations at two plants. At the time, the union effectively gave up its pay raise by agreeing to a 5% increase that would be set aside in a company fund and used to reduce costs. Management had initially called for a 10% wage cut. Volkswagen's management also drew up an additional restructuring plan, approved by the board last month, that raises the global headcount reduction to as many as 100,000 and calls for a review of alternative uses for four plants in Germany.