Volkswagen Plans Wage Freeze Through 2030, Union Resists

Volkswagen is planning a wage freeze for its more than 660,000 employees worldwide through 2030, according to a communication from the IG Metall union and reported by the company’s European and World Works Council. The move, which has been in effect since the beginning of October, represents a significant departure from Volkswagen’s previous practice of factoring in inflation adjustments and regular wage increases into its global personnel cost budgets.

The union anticipates that this policy could lead to real wage losses of at least 10% for employees. These plans come as Volkswagen aims to reduce costs and streamline operations amid a broader restructuring effort that includes the elimination of 50,000 jobs globally – in addition to previously announced cuts. The future of several key Volkswagen and Audi plants, including those in Emden, Hannover, Zwickau, and Neckarsulm, remains uncertain beyond 2031-2034.

Negotiations over new tariff agreements are expected to commence at the end of November, covering both Volkswagen’s in-house tariff and the broader collective bargaining agreement for the metal and electrical industries, impacting brands like Audi, MAN, and Porsche. IG Metall is seeking a 5% wage increase. Volkswagen has declined to comment on the union’s statements, stating it will first address tariff-related matters internally through negotiations.

This announcement follows a similar outcome in the 2024 tariff negotiations, which also included a wage freeze for 130,000 Volkswagen employees, with a 5% wage increase channeled into a fund rather than direct employee compensation. The company’s decision to terminate nearly all tariff agreements prior to these negotiations underscores the scale of the operational changes underway.