IG Metall: VW Plans to Freeze Salaries Through 2030

According to the German Metalworkers' Union (IG Metall), VW employees face years of wage freezes. There are plans to freeze the salaries of more than 660,000 employees worldwide through 2030, IG Metall writes in a statement on its website. The “Süddeutsche Zeitung” had previously reported on this.

“The European and Global Group Works Council (E/WKBR) informed the workforce today via the intranet about the Group Executive Board’s plan,” the statement reads. The Group Executive Board has “instructed HR managers worldwide to implement ‘zero wage increases until 2030,’ meaning to freeze the current collective bargaining wage level and suspend any pay raises.” This new directive is already in effect and has been in place since the beginning of October.

IG Metall criticized the VW Group for breaking with its previous practice, which had always included inflation adjustments in its global personnel cost budgets and also consistently factored in collective bargaining-based pay increases.
The union fears real wage losses of at least ten percent should the plans be implemented.

Collective bargaining begins

Negotiations on a new collective bargaining agreement are expected to begin at the Volkswagen Group in late November. According to IG Metall, negotiations will cover both the VW in-house collective bargaining agreement and the regional collective bargaining agreement for the metal and electrical industry, which applies to Audi, MAN, and Porsche, among others. The union is demanding a five percent pay increase. 

The European and Global Group Works Council called the company’s approach absurd and pointed out that management has yet to take a position regarding the collective bargaining negotiations. The works councils noted that personnel costs account for only a fraction of the cost of sales. Volkswagen did not initially issue a statement.

Group in the midst of massive upheaval

Just under a month ago, Volkswagen terminated nearly all collective bargaining agreements ahead of the upcoming negotiations. The Group Executive Board plans to cut 50,000 jobs worldwide in the coming years—in addition to previous layoff plans within the Group. However, specific plans must first be negotiated with the employees. Furthermore, the future of the VW plants in Emden, Hanover, and Zwickau, as well as the Audi site in Neckarsulm, remains uncertain beyond the years 2031 through 2034.

During the 2024 collective bargaining negotiations, in addition to job cuts, there was a zero wage increase for 130,000 VW employees. Similar to the agreement in the metal and electrical industry, a five percent pay increase will be paid in two installments into a fund rather than directly into employees’ accounts