Cost-cutting efforts at VW – pay negotiations brought forward

WOLFSBURG (dpa-AFX) - Negotiations on a new remuneration system are being brought forward as part of Volkswagen's cost-cutting efforts. The parties to the collective agreement are meeting for the first time today, around seven weeks before the originally planned start date of January 1, according to a joint statement. The outdated and overly complex system is to be revamped, while the total volume will be reduced by six percent, said Arne Meiswinkel, Chief Human Resources Officer of the Volkswagen brand.

Daniela Cavallo, chairwoman of the general works council, emphasized that a logic of vested rights prevents possible disadvantages at the individual level. At the beginning of the year, she had already pointed out that the six percent reduction target announced by VW was the upper limit that had been agreed upon. This also provides employees with downside protection, Cavallo said in January.

Shortly before Christmas, the company and the union agreed on a restructuring program that envisages the loss of 35,000 jobs in Germany by 2030. Europe's largest car manufacturer aims to reduce labor costs by a total of €1.5 billion annually. The decision to forego various bonus payments and wage increases is already having a noticeable impact in the short term. In return, VW has reinstated the previously terminated job security agreement and extended it until 2030.

Negotiations are now being brought forward in order to "enable a well-founded and differentiated discussion of the complex content of the new remuneration system," according to the company. The previous system—with around 6,000 different work systems and 167 job descriptions—will be fundamentally simplified.

According to the company, Volkswagen AG's in-house collective agreement applies to around 100,000 employees at its sites in Braunschweig, Emden, Hanover, Kassel, Salzgitter, and Wolfsburg. From the beginning of 2026, the three Saxon VW locations in Chemnitz, Dresden, and Zwickau will become part of the agreement. The new remuneration system is to become binding on January 1, 2027.