Works council says VW plans global pay freeze to 2030

Volkswagen has told human resources managers around the world to plan for "zero increases through 2030," the carmaker's employee representatives said on Monday. That would hold pay at current collectively bargained levels and stop all raises for the group's roughly 660,000 staff, according to Reuters via MarketScreener. IG Metall, Germany's metalworkers' union, cited a notice that VW's European and Global Group Works Council posted to staff on the company intranet. The notice confirmed an earlier report by Süddeutsche Zeitung.heise.de+1

The works council said the instruction has applied since the start of October. It also said the move breaks with VW's past practice of building inflation compensation and room for negotiated raises into its personnel budgets. If the policy holds, workers could lose an estimated 10% or more in purchasing power by the end of the decade.heise.de

More than base pay

Süddeutsche Zeitung said internal documents for international senior management describe a "realignment" of collective bargaining that takes effect in the fourth quarter. The plan also includes cuts to variable pay, special payments, benefits and jobs. The guidelines reportedly let terms vary by brand and region, but every unit is expected to make an "appropriate" contribution to savings targets.heise.de

Volkswagen has not confirmed the documents. "We do not comment on such speculation," a company spokesperson said, adding that bargaining topics should first be discussed internally in negotiations.tageblatt.de

Unions vow resistance

The works council called management's approach "absurd" and its implementation "rather unrealistic," and said it expects strong resistance. "At Volkswagen, pay development is decided at the negotiating table, not by decree from the executive boardroom," an IG Metall spokesperson said.timeslive.co.za

IG Metall is asking for a 5% raise. Talks over VW's in-house contract and the industry-wide metal and electrical agreement, which covers Audi, MAN and Porsche Dr. Ing. h.c. F. Porsche AG, are expected to start in late November. The two sides are moving toward a confrontation as new wage negotiations open in Germany.bloomberg.com+1

Deepening restructuring

The plan comes on top of a 2024 deal that froze raises for about 130,000 VW workers in Germany in return for job security through 2030. In early September, the supervisory board approved a plan to cut about 50,000 more jobs worldwide. That is on top of 50,000 cuts already agreed, and four German plants face an uncertain future. In late September, VW also gave notice that several in-house collective agreements will end on December 31, 2026.deutschlandfunk.de+1

The works council summed up its position bluntly: "Such wishful thinking on the part of the Wolfsburg employers cannot become reality".marketscreener.com