In ongoing collective bargaining negotiations, Volkswagen AG has announced a series of cost-cutting measures aimed at safeguarding its future competitiveness amid economic challenges in the automotive industry. Following discussions with representatives from IG Metall, the company expressed its inability to meet union demands, including a 7 percent pay increase and the reinstatement of terminated collective agreements without modification. Instead, Volkswagen has proposed a 10 percent pay cut to facilitate future investments and maintain job security.
Arne Meiswinkel, Volkswagen AG’s chief negotiator, voiced concern over deteriorating economic conditions in Europe, particularly within Germany’s automotive sector, noting that the Volkswagen brand’s margin of 2.1 percent underscores the need for “consistent action to safeguard future success.” This proposal includes significant changes to pay structures, including a 10 percent cut in wages for workers under collective agreements, elimination of bonuses, and restructuring of the “Tarif Plus” bracket bonus system to align more closely with profit-sharing initiatives.
Volkswagen has also proposed removing protections for employees who joined prior to 2005, with plans to establish a 35-hour standard workweek across the board. Other efficiency measures would impact temporary workers and trainees, with the company seeking to match workforce requirements more closely with operational needs, including revising hiring practices for trainees and dual students.
The union’s demands for maintaining the current terms of the collective agreements have been met with Volkswagen’s proposal for a more standardized, competitive collective bargaining agreement. With the next round of negotiations set for November 21, the company has stressed the importance of shared responsibility to navigate economic uncertainties.
The negotiation outcomes could impact approximately 120,000 Volkswagen AG workers, including employees at Volkswagen Financial Services, Volkswagen Immobilien GmbH, and dx.one GmbH, with the duty to refrain from industrial action.
