Volkswagen appears to be taking another drastic step to cut costs. According to internal documents reported by the “Süddeutsche Zeitung”, the massive European car manufacturer reportedly plans to freeze wages for many of its approximately 600,000 worldwide employees until 2030. For those affected, foregoing salary increases could result in an income loss of around ten percent, especially given current inflation rates. These plans could also introduce new restrictions for the 275,000 employees based in Germany.
This planned lengthy wage stagnation stems from internal papers detailing the “Group Target Picture” future planning designed for international management. These documents refer to a “reorientation” of international collective bargaining agreements. New guidelines, effective from the fourth quarter, propose a “Pay freeze until 2030,” achieved by suspending salary increases. These guidelines also include reducing variable compensation, special payments and benefits, alongside planned job cuts.
While the internal documents mention that the framework will consider the specific conditions of different parts of the Volkswagen conglomerate, suggesting that not every region may implement a complete wage freeze, the plans mandate that all brands, regions, and operations make an “appropriate” contribution toward the required cost reductions. When contacted for comment, VW stated that it would not comment on “such speculation.” The company noted that the upcoming negotiation round is earmarked for discussing “internal operational agreements of any kind” first.
