In an internal memo from the carmaker, excerpts of which were seen by Reuters on Thursday, it is stated that the introduction of a new pay system would reduce the collective wage bill by six percent on January 1, 2027. The reduction would apply to the total volume and not to the reduction in upper wages. However, the savings are only likely to be felt in the longer term.
At the same time, VW and the employees agreed on a regulation for the protection of vested rights that prevents salaries from being cut. Those whose pay is too high under the new system will initially continue to receive their salary, but will not be fully included in future wage increases. According to the works council, no one's existing pay will be affected.
Volkswagen and IG Metall had agreed shortly before Christmas, in an unprecedented marathon of negotiations, to renegotiate the salary structure in the decades-old company wage agreement, among other things. The aim is to achieve a competitive level of pay, the statement said. To do this, Volkswagen first wants to examine where the company stands compared to other companies in the industry. From the beginning of 2026, the new wage structure will then be negotiated with the employees.
Overall, the Wolfsburg-based carmaker wants to reduce labor costs by 1.5 billion euros annually. In addition to the changes in the salary structure, the waiver of some bonus payments also plays a role. In addition, VW employees are waiving wage increases. In return, the three-decade-old job security agreement has been reinstated and extended until 2030.
(Report by Christina Amann, edited by Ralf Banser. If you have any questions, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)