[Reuters]
[Reuters]

Volkswagen Group, in the midst of a sweeping restructuring, is pushing to freeze wages at most of its operations worldwide through 2030.

German daily Süddeutsche Zeitung reported Monday, citing internal company documents, that Volkswagen management had issued the directive in connection with site-level collective bargaining set to begin in the fourth quarter of this year.

Volkswagen's global works council confirmed the same day that it had obtained internal information showing management had instructed human resources officials worldwide to halt wage increases through 2030, according to Reuters.

The works council said management had ordered wages frozen at this year's levels through 2030, scrapping existing arrangements that had allowed inflation adjustments or site-by-site negotiations.

Süddeutsche Zeitung reported that without wage increases, real incomes for employees could fall by as much as 10 percent over the coming years when inflation is taken into account.

Volkswagen employed 663,000 workers at 111 sites worldwide as of the end of last year, including 275,000 in Germany.

Reuters said the works council denounced management's plan as "absurd" and warned of strong resistance, calling its feasibility "highly unrealistic." A spokesperson for the IG Metall metalworkers union said wages at Volkswagen "are determined at the negotiating table, not by management decree."

Volkswagen told media it would not comment on "such speculation," and a company spokesperson said only that new negotiations scheduled for later this week would be the forum for discussing labor costs.

Local media expect much of management's plan to be blocked. IG Metall has entered collective bargaining with management demanding a 5 percent wage increase over 12 months. At the Chattanooga, Tennessee plant, where the United Auto Workers union is present, a collective agreement was reached in February providing for annual wage increases of 3 to 6 percent through 2030.

Volkswagen is carrying out the most intensive restructuring in its history under CEO Oliver Blume.

Labor and management reached an agreement in December 2024 to cut 35,000 jobs in Germany and halt production at two factories. Management had initially demanded a 10 percent wage cut, while the union agreed to a nominal 5 percent increase to be channeled into a company fund for cost savings — in effect giving up real wage gains.

Volkswagen's supervisory board approved a plan earlier this month to cut an additional 50,000 jobs on top of the 50,000 already agreed, bringing the total global reduction to as many as 100,000 workers. A separate proposal to convert four German factories to other uses between 2031 and 2034 is also under consideration.


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