Volkswagen reportedly plans salary freeze through 2030

Salary freeze as part of the cost-cutting program

Volkswagen is reportedly planning a multi-year zero increase for many of its roughly 600,000 employees worldwide. According to internal documents for international top management, salaries are to be largely frozen through 2030. The group did not confirm the plans; a spokesperson referred to the ongoing collective bargaining talks and did not comment on “such speculation.” For the roughly 130,000 employees under VW’s in-house collective agreement, a salary freeze would follow cuts already agreed: in the 2024 savings package, they initially waived an agreed pay increase of 5.5 percent.

Possible consequences for employees

If prices continue to rise, a zero increase would significantly reduce purchasing power. Economic researchers expect inflation of around three percent for this year and next; by 2030, real income could fall by about ten percent according to the calculations cited. The internal guidelines are due to apply to global collective bargaining from the fourth quarter of 2026 and allow regional flexibility, but do not set out clear criteria for an appropriate contribution by individual brands, regions or plants.

• Budgets for pay increases are to be cut.
• Variable pay, special payments and certain benefits are set to be reduced.
• Management is calling for higher productivity, more time flexibility and less overtime.
• Further job cuts are expected mainly outside production.

IG Metall demands five percent more

IG Metall is demanding five percent more pay in the new collective bargaining round. The demand also applies to the metal and electrical industry, whose sector-wide collective agreement covers Porsche, Audi and MAN; in total, the union negotiates there for around four million employees. Volkswagen’s global works council rejects a blanket salary freeze. After the termination of a large part of the collective agreements at the end of September, allowances and additional pay are also under discussion at VW. In the metal industry, strikes could begin in November; at Volkswagen, from January.

Pressure on plants and international differences

VW CEO Oliver Blume is pushing the cost-cutting program under the internal title “Group Target Picture.” The plants in Emden, Hanover and Zwickau, as well as Audi’s plant in Neckarsulm, are among those under pressure. At the same time, the U.S. plant in Chattanooga shows the conflict of objectives: the UAW recently secured the first collective agreement for an auto plant in a traditionally anti-union southern state there; wage increases of around 20 percent are planned between 2027 and 2030. At Porsche, employees had already accepted, as part of a future package, the waiver of 3.5 percent of future collectively agreed increases as well as parts of allowances.