Volkswagen Group has instructed its human resources managers worldwide to plan no pay increases for its more than 660,000 employees until 2030, IG Metall said on Monday, a claim the carmaker declined to confirm or deny.
The instruction, which the union says has been in force since early October, would freeze current pay levels and suspend all increases, breaking with the group’s practice of budgeting for inflation compensation and negotiated raises, and IG Metall calculates that staff would lose at least 10% of their purchasing power by 2030 if prices keep rising at recent rates.
The union’s account rests on an information letter from Volkswagen’s European and World Group Works Council to employees, which described the management order as “Nullrunden bis 2030,” or zero rounds until 2030.
“We do not comment on such speculation,” a group spokesperson said, adding that collective bargaining matters of any kind must first be the subject of internal negotiations, according to dpa.
The Freeze
The works council called the approach absurd and said it was contradictory for the company to order pay freezes when the employer side had not yet set out its position for the bargaining round due to start at the end of November, and it noted that personnel costs make up only a fraction of operating costs.
Those talks cover two agreements at once, the in-house contract for Volkswagen AG and the regional contract for the metal and electrical industry that applies to Audi, Porsche and MAN, and IG Metall is demanding a 5% pay rise under a package it adopted on September 23.
Volkswagen had already set the stage on September 30, when it served notice to end most of its collective agreements at Volkswagen AG with effect from December 31, 2026, excluding the job guarantees, after both sides invoked the reopener clause of their December 2024 settlement, which applies when its economic assumptions shift sharply.
IG Metall counted 10 of the 13 agreements that make up the Volkswagen house contract among those terminated, including the Manteltarifvertrag that sets working time, conditions and allowances for more than 100,000 employees in Germany.
The company declined to give a number, and Thorsten Gröger, the union’s Lower Saxony district chief, called the move “an ugly foul against the workforce.”
Works council chair Daniela Cavallo said she expected a “fierce confrontation at the turn of the year,” when employees could first feel the effect of the lapsed agreements.
Arne Meiswinkel, Chief Human Resources Officer of the Volkswagen brand, said at the time that the market changes were “structural and deep-reaching” and that the group needed to implement the measures of its “Group Target Picture 2030” quickly and systematically.
Meiswinkel cited structural market changes and price pressure from low-priced Chinese exports, and the company rejected the 5% claim on the grounds that overheads must fall.
Terminated agreements remain in force under German law until replaced, so nothing changes for employees on December 31 unless a new deal is struck, which is why the union is treating the alleged HR instruction, rather than the formal notice, as the opening move.
50,000 Cuts and 4 Plants
A freeze would come on top of the restructuring the supervisory board approved unanimously on September 3, which calls for 50,000 further job cuts by 2030 on top of the roughly 50,000 agreed across the group since late 2024, or about 8% of a global workforce that stood at 667,164 at the end of 2025.
Four German plants, Emden, Zwickau and Hanover for the Volkswagen brand and Neckarsulm for Audi, together employing more than 45,000 people, have until June 2027 to find an alternative production concept or face closure or structural reallocation after 2031, and the union’s statement describes their future beyond 2031 to 2034 as open.
Reuters reported on September 10 that Volkswagen puts the cost of the cuts and potential closures at about 16 billion euros ($18.0 billion), including about 10 billion euros ($11.2 billion) for severance tied to up to 60,000 positions.
Chief Executive Oliver Blume has told staff the group faces a cost disadvantage of about 20% against rivals and tied the plan to lifting the operating return from about 4% to 9% by 2030, against 3.8% in the first half of 2026 and 2.8% for 2025, when operating profit fell 53% to 8.9 billion euros ($10.0 billion).
The 2024 Precedent
Employees have faced the scenario before, since the December 2024 settlement that shed more than 35,000 German jobs by 2030 while ruling out plant closures and forced redundancies also delivered a zero round for the roughly 130,000 staff on the Volkswagen house agreement.
The 5% rise agreed in the wider metal and electrical sector was paid in two stages into a fund rather than to employees, the union said, so a second freeze through 2030 would extend a period without a take-home pay increase that began in 2025.
The job security guarantees from that settlement, which rule out forced layoffs through the end of the decade, were carried into the September 3 package and excluded from the September 30 terminations, so a pay freeze is the lever that remains once headcount is protected.
Volkswagen did not say whether the HR instruction exists, whether it covers the group’s Chinese joint ventures, which are not consolidated, or how it would apply in countries where pay rises are set by statute or sector agreement, and the union gave no indication of which document it had seen beyond the works council letter.
The report drew an immediate political response, with Alice Weidel, co-leader of the Alternative für Deutschland (AFD), writing on X that inflation threatens staff with “massive purchasing-power losses,” and that her party “will free the car companies from ideological requirements like the combustion-engine ban,” linking the union’s claim to the EU’s 2035 rules rather than to the group’s cost base, which Volkswagen itself attributes to Chinese competition, tariffs and overcapacity.
