Austerity efforts at VW: salary negotiations proposed

Negotiations proposed

Volkswagen: Wage cuts proposed

Volkswagen wants to save billions of euros. For this purpose, discussions with the parties conducting collective bargaining are preferred.

At Volkswagen, negotiations regarding a new payment system are being proposed. The collective bargaining parties will meet for the first time on Thursday. The actual talks are planned for January 1. Outdated and overly complicated systems must be updated, and at the same time six percent of wages must be saved, said Arne Meiswinkel, Human Resources Director of the Volkswagen brand.

However, there should be no direct harm to existing employees. “The personal rights regulations ensure that the introduction of a modern remuneration system means that no one is disadvantaged in terms of mutually agreed monthly remuneration,” stressed Thorsten Gröger, district manager of IG Metall Lower Saxony, to the “Bild” newspaper. General works council chair Daniela Cavallo had stated earlier in the year that VW’s target of a six percent reduction was the agreed upper limit. It’s also a reassurance for employees, Cavallo said in January.

Shortly before Christmas, the company and unions agreed on a restructuring program that will cut 35,000 jobs in Germany by 2030. Overall, Europe’s largest carmaker wants to reduce labor costs by 1.5 billion euros per year. The abandonment of various bonus payments and wage increases is already visible in the short term. In return, VW restored the previously terminated employment guarantee and extended it until 2030.

The negotiations are now being advanced to “allow for a reasoned and nuanced discussion regarding the complex contents of the new remuneration system,” according to the company. The previous system – with around 6,000 different work systems and 167 job descriptions – will be fundamentally simplified.

According to the company, Volkswagen AG’s in-house rates apply to approximately 100,000 employees at its Braunschweig, Emden, Hanover, Kassel, Salzgitter and Wolfsburg locations. From early 2026, three VW sites in Saxony, Chemnitz, Dresden and Zwickau, will be part of the contract. The new remuneration system is supposed to become binding on January 1, 2027.