No wage increases, no inflation adjustments – until the end of the decade. Volkswagen has instructed the entire group to freeze the salaries of all employees worldwide at the current level.

The Volkswagen GroupplansAccording to the works council and IG Metall, to freeze the salaries of its around 660,000 employees worldwide until 2030. The company's board of directors has instructed human resources managers worldwide to achieve "zero rounds by 2030," IG Metall reported on Monday, citing information from the European and Global Works Council.

The “Süddeutsche Zeitung” had previously reported on an internal paper called “Group Target Picture”, which spoke of a “realignment” of international collective bargaining and a “pay freeze until 2030”. Volkswagen has not yet commented on the reports and referred to the upcoming collective negotiations.

Real wage losses of at least ten percent

According to the works council, the requirement has been in effect since the beginning of October. Volkswagen is thus deviating from its previous practice of planning for inflation compensation and scope for collective bargaining increases in its personnel cost budgets. If implemented, there will be real wage losses of at least ten percent by the end of the decadefeared. According to the internal documents, in addition to basic salaries, variable remuneration, special payments and other benefits can also be reduced.

Volkswagen employs around 275,000 people in Germany. The VW company tariff applies to 130,000 of them, and the metal and electrical industry tariff applies to employees of the subsidiaries Audi, Porsche and MAN.

VW terminates collective agreements: austerity measures at the expense of the workers

IG Metall and the VW works council have sharply criticized the plans. The works council described the plan as unrealistic and announced strong resistance: “Such wishful thinking on the part of the Wolfsburg employers cannot become a reality,”the panel said. The union is demanding five percent more wages for employees and points out that wage cuts will not solve the structural problems of the auto industry.

The proportion of labor costs is low anyway. The announcement of the zero rounds is therefore less an economic necessity than a strategic move to strengthen the position of the employers' side in the upcoming negotiations.

The union sees the announcement as an attempt to establish facts before the official start of collective bargaining. The employers have their demandsnot yet officially transmitted, but the “zero round plan” gives “a first foretaste”.

Metal and electrical: First round of collective bargaining begins

Systematic zero rounds

The announcement is reminiscent of the 2024 collective bargaining round, when there was already a zero round for 130,000 employees at Volkswagen. At that time, a salary increase of five percent flowed into a fund in two stages and not into the employees' accounts. During the corona pandemic, employees had already foregone wage increases in order to “secure jobs”. However, the current initiative goes beyond a one-off zero round and is aimed at a wage freeze lasting several years.

Negotiations on the VW in-house tariff and the area tariff for the metal and electrical industries are expected to begin at the end of November. IG Metall has already announced that warning strikes will be possible from November, as the peace obligation expires at the end of October. The group had also terminated almost all collective agreements just a few weeks ago, which IG Metall described as a “frontal attack”.designated.

Volkswagen is in a deep crisis. The supervisory board recently decided to cut 100,000 jobs worldwide. Four German locations – Emden, Hanover, Zwickau and Neckarsulm – will be at risk from 2031. Volkswagen only paid out around 2.6 billion euros in dividends to shareholders at the end of June, while employees last received a pay increase according to the company's collective agreement more than two years ago.

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