Volkswagen Said to Freeze Wages Through 2030, Union Talks Loom

Deep News10-19

According to an internal document seen by a German newspaper, Volkswagen AG plans to impose a wage freeze on most of its 600,000 employees worldwide, with the policy lasting through 2030.

Because of inflation, forgoing pay raises could reduce the real income of the affected employees by about 10%.

The wage freeze plan is one of the measures in the "Group Target Picture," a future planning document approved by Volkswagen Group management, and it is intended for international management negotiations. The document refers to a "readjustment" of international collective bargaining.

The new bargaining guidelines, set to take effect in the fourth quarter, propose a "wage freeze until 2030" by pausing pay increases. The guidelines also include cuts to variable compensation, special allowances and benefits, as well as job reductions.

The report said all brands, regions and plants must make a "moderate" contribution to the cost-cutting targets.

Volkswagen said the upcoming round of negotiations is the formal occasion to discuss various internal operational arrangements.

Note: In September, Volkswagen lowered its performance outlook and doubled its layoff target to 100,000 people, about 15% of its global workforce.

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